After trading for 26 years on the Namibian Stock Exchange (NSX), Barloworld shares traded for the last time on Monday. In its last day trading on February 28, 2022, the industrial behemoth’s shares worth N$55.4 million exchanged hands.
What led to Barloworld’s delisting?
The company with a primary listing on the Johannesburg Stock Exchange said the benefit of maintaining its NSX listing was outweighed by the cost.
But what are the implications of the company’s delisting?
For pension funds, it means they had to sell their positions and look for other local counters to buy into because Barloworld’s dual-listing on the NSX counted towards pension funds’ domestic asset requirement, but with the delisting, the company will no longer count towards ‘domestic assets’, in which Namibian pension funds can hold as a domestic asset.
“This is concerning, as the available universe for Namibian pension funds already remains relatively small and with events like this, it is shrinking. This makes it challenging for pension funds to achieve the best returns for the true beneficiaries of these savings, as they are restricted to where they may invest,” Cirrus Securities, Romé Mostert told The Brief.
In his budget speech last week, South Africa’s Minister of Finance announced that South Africa will increase the offshore exposure allowance for pension funds to 35% directly offshore and if including Africa exposure, up to 45% outside of SA.
“This effectively reduced the minimum SA exposure that South African pension funds must comply with. Namibia has seen the opposite trend, where exposure to dual-listed companies considered as ‘domestic assets’ was gradually reduced from 30% to 10%, while the full domestic asset allocation for Namibian pension funds was increased to 45% from 35% (and may be at risk of further increases).”
How has Barloworld performed on the NSX?
Mostert pointed out that since listing, Barloworld delivered an annualised price return of 7.11% and an annualised total return of 11.6%.
“The relative volumes between Barloworld on the NSX and JSE have remained relatively low and stable over the last decade. However, the recent delisting announcement has caused relative volumes to spike on the NSX – reaching volumes not seen since 2010,” he said.
Annualised Returns Total Return Price Return
Since listing 11.60% 7.11%
20 year 11.56% 7.00%
10 year 8.01% 3.33%
5 year 6.35% 0.96%
3 year 5.38% -1.22%
1 year 52.35% 33.63%
