3 New Funds to Boost Capital Market

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By Emma Kakololo

WINDHOEK

Two of the country’s leading financial services providers Old Mutual Investment Group and NedCapital yesterday launched three funds to provide Namibians with additional investment opportunities.

The three funds, namely General Private Equity, Mining, and Expanded Infrastructure, according to Old Mutual’s Chief Executive Officer, Johannes Gawaxab, would assist investors to contribute to the deepening of financial markets, assist in stemming the outflow of capital and enhance the competitiveness of the country in general.

“This is indeed a remarkable innovation and addition in the development and sophistication of the local capital markets.”

Following the launch in 2003 of the old Mutual Midina Fund, which provides debt funding for infrastructure development projects in the country, 10 projects with a total value of N$244 million have been funded.

The projects include the Ongwediva Medipark private hospital, bulk servicing of erven at Long Beach in Walvis Bay, upgrading of various Namibia Wildlife Resorts facility centres such as Etosha, Waterberg and Sossus Dune Lodge, the construction of the Roads Contractor Company as well as the Rehoboth Medical Centre.

The new funds seek to invest in unlisted companies and projects that have an acceptable track record, accompanied by audited financial statements, with strong growth prospects, and are managed by experienced and reputable management teams who subscribe to good corporate governance practices.

Mining investments will include advanced stage exploration projects.

“We, at times, mistakenly equate unlisted investments with throwing good money after bad and with mediocre investment returns. If managed properly, this asset class has the potential to outperform traditional asset classes over the long term,” said Gawaxab.

He said due to unfortunate experiences with private equity investments in the country though, there appears to be some form of discomfort and skepticism towards equity investments.

As a result he said, Namibians “find ourselves economically in an absurd situation for a developing country where they are net exporters of capital and save more than they are investing, whilst the country was crying out for job creation, infrastructure development, value addition, beneficiation and enterprise development.

“It looks as if we are saving ourselves into poverty and neglecting much needed investments in the process,” he said, and urged other institutions also to at least use a portion of their savings to improve the living standards of the country’s population.

The country’s excess savings over its investments averaged N$600 million for the period 1990 to 2000, N$1,8 billion for the five years from 2000 to 2005 and N$5,2 billion for the year 2006.

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