Staff Writer
Capricorn Group, FirstRand Namibia, Namibian Breweries lost a combined N$6.5 billion in value after the counters recorded massive loses on Thursday’s trade on the Namibian Stock Exchange (NSX).
The biggest loser was FirstRand Namibia which shed a massive N$2.9 billion in value, closing Thursday trade with a market capitalization of N$5.3 billion, down 35.37 percent.
Diversified financial services group, Capricorn Group, the owners of Bank Windhoek shed N$1.8 billion in value, closing Thursday trade with a market capitalization of N$5.3 billion, down 25 percent.
Ohlthaver & List Group controlled Namibian Breweries’ market capitalization plummeted 25,35 percent, down N$1.8 billion in value to close Thursday’s trade at N$5.3 billion after shares valued at N$69 million were traded.
“In our view Namibia is just catching up with South Africa in terms of responding to the Covid-19 global pandemic and the subsequent negative investor sentiment. This doesn’t necessarily mean that it’s time to buy as you need a strong economic recovery for banks to perform well. We don’t see any catalyst for changing the course of our economy in a positive direction at this time,” Simonis Storm Managing Director, Bruce Hansen.
Romé Mostert from Cirrus Capital attributed Thursday’s selloff to foreign investors exiting their local positions.
“What happened was we had foreign investors selling their Namibian positions and it has to do with the continued economic recession. Profits are also no longer that good because of the existing economic conditions,” he said.
“Shares were being offloaded at a discount; this is to get someone to buy the shares as they exit their investments from the country. However, today we saw some bounce back and you usually see some interest coming back after such big drops.”
PSG Namibia Head of Research, Eloise du Plessis said although counters recovered on Friday’s trade, “yesterday’s trades and the recovery today (Friday) is the hallmark of an illiquid market. Namibian Breweries’ price has been too high for a long time when it was trading above N$43. When it traded down, it may have overshot on the down side, but today (Friday) it recovered to N$34.50.”
“The Capricorn Group trade yesterday (Thursday) was a small one,, likely a retail investor needing the cash and willing to sell at a low price. That was, however, the last price traded so that is the one all Capricorn Group shares are valued at. This is why it is so important not to act on short term price movements, especially in an illiquid market like the NSX Local. The movements that happened over 2 days in the Namibian market would happen in seconds on the Johannesburg Stock Exchange.”
“It is also worth noting that these dips offer buying opportunities if there is someone else willing to sell at that low price. Price discovery is painful in a market where there are so few trades per day.”
