Simonis Storm voices confidence in govt debt strategy

Ogone Tlhage
Stockbroker Simonis Storm has voiced its confidence in the government’s ability to manage public debt. This comes as the redemption date for the government’s 2015 US$750 million Eurobond draws closer.

Explaining its stance, the company said healthy economic growth would be sufficient to help the treasury carry its obligations, despite a miniscule growth in public debt. “With the economy experiencing healthy growth, we believe that the government can manage the country's debt sustainably. For the first quarter of 2024, gross domestic product (GDP) growth was reported at 4.7%,” Simonis Storm said in its fixed income report for June.



Debt allocation

The increase in domestic debt was primarily driven by higher net issuance of treasury bills (TBs) and internal registered stock (IRS). TBs rose by 2.2% month-on-month, IRS by 1.08%, and inflation-linked bonds (ILBs) increased by a moderate 0.9%, a Simonis Storm analysis showed.

By the end of June, IRS had an outstanding debt amount of N$69.94 billion, followed by TBs at N$40 billion and ILBs at N$9 billion. Overall, the total net issuance slightly exceeded the N$1.65 billion outlined in the borrowing plan by N$30 million, ending at N$1.68 billion.

“This increases the likelihood of slight under-allocations on IRS for the upcoming month. However, we do not expect a significant deviation from the borrowing plan,” it said.

Reflecting on macroeconomic conditions, Simonis Storm projects a 25 basis points cut before the end of the year.

"The Namibian yield curve reflects robust GDP growth and significant economic developments, including substantial foreign direct investments in oil, gas and green hydrogen projects. While South Africa's challenges contribute to higher sovereign risk, the outlook for Namibia still appears more stable and promising."



Eurobond redemption

Finance minister Ipumbu Shiimi said Namibia will honour its US$750 million (N$14 billion) Eurobond obligation, which matures in 2025.

He made the remarks during an appearance on Network Television’s The Agenda, saying Namibia had in the past demonstrated its ability to settle its debt obligations. Shiimi added that government had been putting money aside to meet its debt obligation. “This is the first Eurobond that is maturing," he said.

"We had one that we retired in 2021, so that one is fully repaid, so we have experience in repaying our Eurobonds."

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Namibian Sun 2024-07-17

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Nam 2.22 SAME | Oryx Properties Ltd 12.1 UP 1.70% | Paratus Namibia Holdings 11.99 SAME | SBN Holdings 8.45 SAME | Trustco Group Holdings Ltd 0.48 SAME | B2Gold Corporation 47.34 DOWN 1.50% | Local Index closed 677.62 UP 0.12% | Overall Index closed 1534.6 DOWN 0.05% | Osino Resources Corp 19.47 DOWN 2.41% | Commodities: Gold US$ 2 465.39/OZ DOWN -0.0012 | Copper US$ 4.41/lb DOWN -0.0104 | Zinc US$ 2 872.30/T DOWN -1.05% | Brent Crude Oil US$ 85.07/BBP UP +1.06% | Platinum US$ 1 009.32/OZ UP +0.67% Sport results: Currie Cup: NovaVit Griffons 10 vs 52 Vodacom Bulls Rugby World Cup U20: New Zealand U20 31 vs 55 France U20 | Australia U20 36 vs 29 Wales U20 | England U20 31 vs 20 Ireland U20 | Georgia U20 40 vs 36 Fiji U20 | Argentina U20 34 vs 24 South Africa U20 | Italy U20 28 vs 15 Spain U20 Weather: Katima Mulilo: 12° | 32° Rundu: 12° | 33° Eenhana: 11° | 33° Oshakati: 11° | 31° Ruacana: 14° | 31° Tsumeb: 15° | 29° Otjiwarongo: 9° | 28° Omaruru: 9° | 27° Windhoek: 8° | 23° Gobabis: 10° | 28° Henties Bay: 11° | 17° Wind speed: 18km/h, Wind direction: S, Low tide: 06:18, High tide: 12:50, Low Tide: 18:28, High tide: 00:54 Swakopmund: 13° | 15° Wind speed: 23km/h, Wind direction: SW, Low tide: 06:16, High tide: 12:48, Low Tide: 18:26, High tide: 00:52 Walvis Bay: 11° | 20° Wind speed: 28km/h, Wind direction: SW, Low tide: 06:16, High tide: 12:47, Low Tide: 18:26, High tide: 00:51 Rehoboth: 9° | 25° Mariental: 9° | 26° Keetmanshoop: 9° | 23° Aranos: 9° | 27° Lüderitz: 10° | 18° Ariamsvlei: 9° | 21° Oranjemund: 10° | 18° Luanda: 20° | 22° Gaborone: 11° | 28° Lubumbashi: 12° | 29° Mbabane: 12° | 28° Maseru: 5° | 21° Antananarivo: 8° | 24° Lilongwe: 15° | 27° Maputo: 16° | 32° Windhoek: 8° | 23° Cape Town: 11° | 14° Durban: 14° | 27° Johannesburg: 12° | 22° Dar es Salaam: 21° | 29° Lusaka: 15° | 28° Harare: 13° | 27° Economic Indicators: Currency: GBP to NAD 23.65 | EUR to NAD 19.89 | CNY to NAD 2.51 | USD to NAD 18.19 | DZD to NAD 0.13 | AOA to NAD 0.02 | BWP to NAD 1.3 | EGP to NAD 0.37 | KES to NAD 0.14 | NGN to NAD 0.01 | ZMW to NAD 0.69 | ZWL to NAD 0.04 | BRL to NAD 3.32 | RUB to NAD 0.21 | INR to NAD 0.22 | USD to DZD 134.2 | USD to AOA 872.64 | USD to BWP 13.49 | USD to EGP 48.15 | USD to KES 129.98 | USD to NGN 1555 | USD to ZAR 18.19 | USD to ZMW 26.05 | USD to ZWL 321 | Stock Exchange: JSE All Share Index Same 0 | Namibian Stock Exchange (NSX) Overall Index 1783.48 Down -2.4% | Casablanca Stock Exchange (CSE) MASI 13456.34 Up +0.17% | Egyptian Exchange (EGX) 30 Index 27828.92 Down -0.44% | Botswana Stock Exchange (BSE) DCI 9380.4 Same 0 | NSX: MTC 7.75 SAME | Anirep 8.99 SAME | Capricorn Investment group 17.34 SAME | FirstRand Namibia Ltd 49 DOWN 0.50% | Letshego Holdings (Namibia) Ltd 4.1 UP 2.50% | Namibia Asset Management Ltd 0.7 SAME | Namibia Breweries Ltd 31.49 UP 0.03% | Nictus Holdings - Nam 2.22 SAME | Oryx Properties Ltd 12.1 UP 1.70% | Paratus Namibia Holdings 11.99 SAME | SBN Holdings 8.45 SAME | Trustco Group Holdings Ltd 0.48 SAME | B2Gold Corporation 47.34 DOWN 1.50% | Local Index closed 677.62 UP 0.12% | Overall Index closed 1534.6 DOWN 0.05% | Osino Resources Corp 19.47 DOWN 2.41% | Commodities: Gold US$ 2 465.39/OZ DOWN -0.0012 | Copper US$ 4.41/lb DOWN -0.0104 | Zinc US$ 2 872.30/T DOWN -1.05% | Brent Crude Oil US$ 85.07/BBP UP +1.06% | Platinum US$ 1 009.32/OZ UP +0.67%