The Namibian Stock Exchange (NSX) displayed a mixed performance this week, with the NSX Local index inching up by 0.01% to 680.6, while the NSX Overall Index posted a more substantial gain of 2.33%, closing at 1801.3. As of August 18, 2024, FirstRand Namibia maintained its position as the largest local company on the exchange, boasting a market capitalization of N$12.4 billion. It was followed by Capricorn Group at N$10.1 billion, Namibia Breweries at N$6.1 billion, and Mobile Telecommunications at N$5.7 billion. Standard Bank Namibia Holdings emerged as the week’s top performer, with its share price climbing 0.6% to close at N$8.86, while Capricorn Group secured the second spot, ending at N$19.5 after a 0.2% increase. Trading volume was led by Standard Bank Namibia Holdings with N$1.8 million worth of shares changing hands, followed by Capricorn Group with N$0.9 million in transactions. Meanwhile, the Namibian Dollar showed significant strength against major currencies, gaining 2.46% against the US Dollar to close at N$17.85, 1.03% against the British Pound to N$23.10, and 1.39% against the Euro, ending at N$19.69.
In a significant move, the Bank of Namibia’s Monetary Policy Committee (MPC) has reduced the Repo rate by 25 basis points to 7.50 percent. This decision, made during the MPC’s fourth bi-monthly meeting of 2024, aims to support the domestic economy while maintaining the currency peg with the South African Rand. The rate cut comes against a backdrop of moderating inflation, which averaged 4.8 percent in the first seven months of 2024, down from 6.2 percent in the same period last year. The Bank has revised its inflation forecasts downward to 4.7 percent for 2024 and 4.4 percent for 2025, citing the appreciation of the Namibia Dollar and moderation in crude oil prices as key factors. Despite the rate cut, Namibia’s economic outlook remains cautious. While economic activity rose in the first half of 2024, growth is expected to decelerate to 3.1 percent for the full year, down from 4.2 percent in 2023. This slowdown is primarily attributed to challenges in the primary industry, particularly the ongoing drought conditions. The country’s merchandise trade deficit has widened to N$19.9 billion in the first half of 2024, up from N$12.3 billion in the same period last year, driven by higher import payments and lower diamond exports. However, the stock of international reserves remains robust at N$60.8 billion as of July 31, 2024, providing an estimated 4.1 months of import cover and ensuring the stability of the currency peg.
