Empower but watch the red lights!

By Tirivangani Masawi
July 2012
Prime Business
Diversified financial services group, Old Mutual Namibia Limited is part of Old Mutual PLC, primary listed on the London Stock Exchange, represented in 29 countries, employing 55 000 people, and serve 12 million customers. Old Mutual Namibia, its shareholders and stakeholders are reaping the benefits of a growth strategy adopted based on the philosophy and vision of putting the customer at the centre of what they are doing.

Whilst the company delivers sustainable value to shareholders, it also believes there is a great need to emancipate ordinary Namibians and give them exposure to property, money market and equity markets, helping them realise that there are possibilities of wealth creation in investing in such markets over the long term.

Old Mutual Namibia is one of the largest investors in the Namibian commercial property market and believes that potential exists in the Namibian market to expand, profitably deploying capital. The recent launch of the multi-million dollar property development in Keetmanshoop is just one example of investing in Namibian assets, says Lionel Matthews, Chief Executive Officer of Old Mutual Investment Group (Namibia) (Pty) Ltd, the largest asset management business in the country.

The project in Keetmanshoop will deliver competitive investment returns to investors, whilst simultaneously create much needed jobs in south of the country and permanently change the socio-economic infrastructure landscape in that region.

Old Mutual Namibia, has always been committed to meet need for creating competitive, value of money financial products and services for its customers and ensuring that they re-invest in the domestic economy in a sustainable manner to the benefit of shareholders and stakeholders. This strategy is testimony of our confidence in the Namibia as a country, economy and market, says Matthews.

Whilst balancing a flourishing multinational portfolio and exploiting a reasonably small market might not fit in the same sentence for OMIGNAM, Matthews believes, “There is a need for Namibia to start considering a more agreed upon way of empowering locals and giving them access to the means of production without causing panic or systemic risk in the economy. The inclusion of locals in sectors such as the banking and non-banking sectors of the economy should be arranged in a manner that would benefit the whole spectrum of economy on a sustainable basis. This is obviously easier said than done and a multiplicity of factors that need to be considered in order to avoid chaos and panic in the economy and market, says Matthews.

According to Matthews, Old Mutual is playing a leading role in the Namibian market, because of a well articulated and understood strategy that is executed with discipline, focus and strong leadership. This has contributed significantly to the share price performing well. Even at current levels, the Old Mutual share is viewed to be trading at a significant discount, which makes this an attractive share to own. Since the beginning of 2012, the Old Mutual share price has increased with more than 20% and shareholders were handsomely rewarded with a strong ordinary and special dividend paid on in June.

Old Mutual is also among the first major corporations in Namibia that concluded a successful broad-based Black Economic Empowerment (BBEE) plan in 2006, which Matthews believes has benefitted all parties whilst giving the company a Namibian “face”.

I think we all agree that there is a legacy that needs addressing in terms of empowering local Namibians and particularly those from previously disadvantage groups. Yes, some market commentators and participants might have a view that transformation in the economy has been slow but we need to be cautious when dealing with sectors such as the banking sector because of the importance of this sector in the economy as a whole, says Matthews.

Commenting on the state of corporate governance in the country, Matthews says that private sector companies (particularly the large ones) are meeting international best practice. With reference to State-owned enterprises (SOE) the governance structures in certain SoEs are well entrenched, others need improvement to ensure good governance practices and leadership overall. PF