SBN debuts with share price increase

Jo-Maré Duddy – Standard Bank Namibia (SBN) on Friday ended its first day of trading on the Local Index of the Namibian Stock Exchange (NSX) with a share price of N$9.00 – 10c a piece or about 1.12% higher than it debuted on the bourse.

The new kid on the block traded 1 000 shares at N$9.00 a piece on Friday.

SBN added N$4.702 billion to the market capitalisation of total shares in issue of the Local Index, pushing it a total of N$36.078 billion.

Its market capitalisation makes it the fourth biggest company on the Local Index after Namibia Breweries (N$9.982 billion), FirstRand Namibia (N$8.935 billion) and Capricorn Investment Group (N$7.944 billion).

SBN’s total number of shares in issue is 522 million, of which 78 million is free float. Its market capitalisation by free float is N$705 million.

Target price

In its initiation report for SBN, IJG Securities pegged a target price of N$10.02 per share for the group.

“We calculate a cost of equity of 14.44% and a sustainable growth rate of 9.69% which leads us to derive a target price of N$10.02 per share. Coupled with expected dividends of 23cps over the next 12 months, we expect a total return of 15.2%,” IJG said.

The analysts, however, placed a hold recommendation on the counter.

“While our expected total return exceeds our cost of equity, mounting economic headwinds pose a risk to the SBN prospectus forecasts as well as our own, and as such we place a ‘hold’ recommendation on the counter. The dissipation of some of the headwinds facing the banking sector is likely to result in an upgrade to this recommendation, all else equal,” IJG said.

SBN’s listing on the NSX was proceeded with a pre-listing dinner on Thursday night.

Empowerment

“The sheer quantum of the initial public offering (IPO) of 81 140 449 shares, valued at N$722 million is a significant capitalisation and value creation in the domestic market,” finance minister Calle Schlettwein said at the occasion.

He added that the listing and its over-subscription are an expression of the strong confidence of Standard Bank in the domestic economy, on the back of its demonstrated business expansion and footprint spanning over 100 years as one of the countries’ oldest commercial banks.

“Equally, the empowerment stake to over 1 900 employees which preceded the IPO action, at the total initial value of N$300 million, manifests the spirit of inclusive development and wealth creation locally,” Schlettwein said.

At the listing price, these shares are now worth N$445 million or 48% mo-re than in 2015 when the empowerment transaction was concluded, SBN chief executive officer, Junius Vetumbuavi Mungunda, said.