Following two interest rate hikes by the Bank of Namibia since June 2014, we have had many questions as to the impact of the increased interest rates on individuals mortgage repayments. As such, we have compiled the below (simple) calculator to assist clients with the calculations. Just change the grey… Continue reading
Trading Statement Bidvest Namibia released a trading statement today in which management has guided EPS and HEPS to be down by between 9% and 11%. The company expects Basic EPS of 115.3 to 117.9c (midpoint of approximately 116.6), while HEPS is expected to be between 115.2 and 117.8 (midpoint of 116.5). This in our view… Continue reading
The Bank of Namibia has hiked rates by 25BP (0.25%) at their August MPC meeting. The key concerns noted by the Bank were the strong growth in PSCE to households, utilised to finance “unproductive spending on luxury goods”, most of which are imported, and the pressure that these imports are putting on the country’s reserve position.
We view this move as positive from the perspective of the Namibian macro-economy (albeit bad for the individual consumer), and have been calling for higher rates for some time – In our January outlook, we noted – “In light of expectations of a weakening external position for Namibia, we believe that 2014 may see BON taking the lead by making interest rate moves before South Africa. While this would be a first for the Bank, given our growth and inflation projections, as well as expectations of strong expansion in private sector credit extension, a weak balance of payments, plummeting reserves and high household indebtedness, we believe that economic conditions in Namibia are likely to be substantially different from those in South Africa, and that should a hike appear imminent in South Africa, that BON may act first by tightening rates” This view now appears to be playing out.
The full MPC statement can be seen below: