28 January 1999

N$2.9 MILLION SOFT LOAN FOR NAMIBIAN STOCK EXCHANGE

The Namibian Stock Exchange and Sweden, through the Swedish InternationalDevelopment Cooperation Agency (Sida), on 28 January 1999 signed a N$2.9million agreement to help upgrade the computers for share trading and administration. The concessional loan by Sida will boost the Namibian StockExchange's contribution to Namibia's economic development.

Phase I of the new computer systems, the equity trading and client administration systems, has been on-line since last November. Phase II, expected during 1999, is set to establish a Central Securities Depository to allow share trading without paper certificates. The project is being implemented through co-operation with the neighbouring Johannesburg Stock Exchange.

Swedish Ambassador in Namibia, Ulla Ström, signed the agreement for the Swedish Government. She said: "Sida has been supporting development for many years, including in Namibia. We target aid directly at the poor, but we have also found that it is important to build up the economic institutions of a developing country. I believe that this loan will help the Namibian Stock Exchange to become more efficient and to contribute significantly to the growth of the Namibian economy and the advancement of Namibians".

The loan will help pay licence and customization fees for the world-class software as well as for new computers and telecommunications links to Johannesburg where the new systems are operated for the NSX. The upgrade has put NSX share trading onto the Johannesburg Equity Trading (JET) system, developed in the US for the Chicago Stock Exchange. Client administration and broker accounting is handled through the Broker Deal Accounting System offered by the Johannesburg Stock Exchange.

The NSX also plans to link to the JSE's Share Trading Totally Electronic (Strate) project to open a central securities depository by July this year. A central depository boosts efficiency and cuts the investor risk and inconvenience of handling paper share certificates. The Namibian Stock Exchange is a not-for-profit association of Namibian businesses who each donated N$10,000 as start-up capital. It operates under from its launch in 1992, growth in the first six years has been dramatic and the original computer would not keep up with the expected trading.

By the end of 1998, the sixth year, there were six stockbroking firms and share trading of over N$1 billion during the calendar year NSX General Manager Tom Minney said: "We are planning for more growth and for further regional integration within the framework of the Southern African Development Community (SADC). We are lucky to have two strong partners in Sida and the Johannesburg Stock Exchange. This top stock exchange computer system makes our share prices widely accessible around the region and meets international standards.

"We aim to keep the NSX lean and efficient so that we can play our role in our country's development. An effective stock exchange raises capital and savings from investors and the market channels this to the most productive local businesses and entrepreneurs. Today's soft loan will help us to keep down transaction charges while we continue to build trading volumes." The NSX is funded by issuers of listed securities, levies on stockbrokers' commission, sales of information and other income. The Sida loan is repayable in local currency over 10 years and carries a 1 per cent a year administration fee.

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