MTC’s listing a positive sign for SOEs – Inkumbi
'Good-quality asset'
The pension fund's CEO said the listing of local telecommunications company MTC has been a good experience for the market.
Government Institutions Pension Fund (GIPF) CEO Martin Inkumbi has lauded the government’s decision to sell a stake in mobile telecommunications company MTC, but says the fund will not be compelled to acquire more shares should Namibia Post and Telecommunications Holdings (NPTH) list MTC's outstanding shares, which went unsold at its initial public offering (IPO) in November 2021. Speaking to Market Watch 100 days into his appoint at GIPF, Inkumbi said MTC’s listing was a good experience for the market overall.
“The benefit is that, in the case of MTC, it is a good quality asset; it’s a fairly strong business generating good profits and dividends for the investors. One cannot say whether it will be the case with other state-owned enterprises [SOEs] that could be [partially] privatised, but it has been a good experience,” he said.
Despite MTC’s financial metrics as a listed entity, it was, however, not a given that GIPF would be invest as Namibia’s biggest pension fund, nor with regards to complying with domestic asset requirements that compel pension funds to invest up to 45% of their total assets in locally-listed companies.
“I do not think the GIPF will be compelled - or feel compelled - to invest in those shares. The GIPF is managed independently by a board of trustees and it is expected that the board of trustees will make investment decisions that are in line with the investment strategy of the GIPF,” Inkumbi said.
“I don’t see how the GIPF will simply take up any asset that is in the market, or feel compelled to take up assets that are not in line with its investment strategy,” he added.
According to its annual report for 2023, GIPF held 214 912 126 shares in MTC, valued at N$1.52 billion, out of a total of N$6.93 billion in terms of its exposure to equities - with a primary listing on the Namibia Stock Exchange (NSX). MTC accounts for 21% of its exposure on the NSX.
At its IPO, MTC made available 367 500 000 shares at a price of N$8.50 per share. In terms of the total shares availed to the public, GIPF holds 58% of MTC’s total listed stock on the NSX.