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Understanding / Your new opportunity

What does a listing entail?

A listing, also known as an Initial Public Offering (IPO), is a process through which a company becomes public by listing its shares on a stock exchange and inviting members of the general public to become shareholders. This is usually done via a prospectus.

What is a prospectus?

A prospectus is a legal document issued by companies that are offering their shares for sale to the general public. A prospectus includes (amongst others) a description of the company’s background, its financial statements and performance for the past 5 years, its corporate governance and its future strategy.

What is a Stock Exchange?

The stock exchange is a virtual market where investors connect to buy and sell shares, most commonly known as stocks or shares, which represent ownership in a public company. In Namibia we have the Namibia Stock Exchange (NSX).

What is a share?

A share is a unit of ownership interest in a company, verified by a share certificate in Namibia. A share entitles the owner to a share of the profits (proportionate to their shareholding) and dividends, if and when declared.

What is a dividend?

A dividend is a sum of money paid, when declared, by a company to its shareholders out of its profits (or reserves). The discretion to declare dividends lies with the Board of Directors of the company.

Why invest?

Shares are designed to provide investors with two types of potential returns, namely income and long-term capital growth. Most shares offer income in the form of dividends, which are typically paid twice a year. Dividends can be seen as a reward for shareholders. Investors may buy shares specifically for dividends.

What is capital growth?

Capital growth, or appreciation, is the increase in the value of the share price of a company over time. A share is a type of investment and is classified as an asset on the balance sheet of the investor.

How to buy and sell shares?

The most common way to buy and sell shares is on the stock exchange using a stockbroker registered with the NSX. You can also apply for shares through a public offer via a prospectus during an IPO. The secondary market involves the buying and selling of shares after the company has been listed.

Why do share prices go up and down?

Share prices change every day due to market forces (i.e. Supply and Demand). If more people want to buy a share (demand) than sell it (supply), then the price moves up. Conversely, if more people want to sell a share than buy it, there is greater supply than demand, and the price will fall. Various factors will have an effect on the share price, including (but not limited to) the growth in the company’s profits, market sentiment and general economic conditions.

What is involved in owning shares and being a shareholder?

  • When you buy a company’s shares, you become a shareholder of that company
  • As a shareholder, you have the right to attend and vote at general meetings
  • As a shareholder, you earn returns when you receive dividends or if you decide to sell your shares when the price of the shares gain in value
  • However, a company may choose not to pay out dividends. For example, the company may instead choose to re-invest profits into the business
  • A company’s share price will be affected by various factors, including (but not limited to) the growth in the company’s profits and future prospects, market fluctuations and general economic conditions. Share prices can also go down and dividends are never guaranteed

Background information on the SBN Holdings share offer:

  • 25.1% of the shares will be on offer during the IPO running from 7 October (opening at 09h00) until 1 November (closing at 12h00)
  • Share price is N$8.90 per share
  • The minimum number of shares that can be bought is 250 shares and thereafter in multiples of 100 (i.e. 250, 350, 450, 1,050, etc.)
  • The application amount is calculated as 250 shares x N$8.90 = N$2,225

What is the minimum number of shares one can buy?

The minimum is 250 shares and thereafter in multiples of 100 (i.e. 350, 450, 550, etc.).

On the day that I buy: do I buy at the price that was quoted on the website and Prospectus? What is the cost per share?

The share price from the day the Prospectus opened (7 October 2019) until the date that the public offer closes (1 November 2019) is locked in at N$8.90.

Once the share is floated on 15 November, market forces will determine the share price.

If applications close at 12h00 and I deliver the documents at 11h55, will my application be accepted? And what is the closing date and time for online applications?

Yes, as long as the payment has been received by 12h00.

Both online and physical applications close at 12h00 on 1 November 2019.

What is the process for applying on behalf of minors/trusts/partnerships, and what documents are required?

The public offer shares may be applied for in the name of a minor but the application must be accompanied with a certified birth certificate in addition to all the other required documents.

The public offer shares may not be applied for in the name of a partnership.

Executors, trustees and individual partners may apply for such public offer shares in their own name or through nominee companies. Documentary evidence of capacity must accompany the public offer application.

Look out for more FAQs to follow.

Should you require any further information, please email Public.Offer@standardbank.com.na.

Do I need to be a Standard Bank client to qualify for shares?

No, any individual is welcome to be part of this opportunity.

Do I have to use EFT as a method of payment?

Yes. The Bank details to be used are indicated in the Prospectus, which can be found on the website or in Standard Bank branches. You can also request a copy of the Prospectus from your Relationship Manager/Private Banker.

What does BBEE mean?

Broad Based Economic Empowerment.

Where do I obtain my reference numbers?

Upon completion of the online application, a reference number will be automatically generated. When completing the application at a Standard Bank Branch, a consultant will provide you with the number.

Are there any fees that I have to pay when applying for the listing?

When applying through Standard Bank Namibia, there will be no fees payable except for any deposit fees that could be incurred.

What should I do with the reference number?

This unique number should be used as a reference when paying for the shares.

Where do I submit my physical documents?

You can submit your documentation at your nearest Standard Bank branch or through your dedicated Relationship Manager or Private Banker.

What are the criteria for share allocation?

The public offer is open to members of the general public. In the event that the offer is oversubscribed, consideration will be given to the following:

  • BBEE status
  • Standard Bank staff
  • Standard Bank clients
  • Namibian applicants

Notwithstanding the criteria set out above, the board of directors will, at its sole and absolute discretion, determine an appropriate allocation, taking into account the NFSC and NSX shareholder spread requirements.

What will my dividends be?

It is SBN Holdings’ intention to pay dividends at a cover of 2.3 times (43% of group profit after tax), subject to the availability of cash resources, regulatory capital requirements and the need to fund future growth opportunities.

Can I buy shares today and also buy next week when I get the funds?

Yes.

What should I do if I submitted an application with an error?

Please contact us on +264 61 294 2449 or Public.Offer@standardbank.com.na and we will make the necessary corrections.

Will there be enough shares and am I restricted to a certain number of shares?

There is no restriction on the amount of shares you can apply for.

What are the benefits to owning shares? What happens when I become a shareholder?

You can enjoy your share of SBN Holdings’ Capital Growth, bi-annual dividend payments as well as the right to vote at SBN AGMs.

How much do shares cost, and what is the minimum investment amount?

The cost is 890 cents (N$8.90) per share. The minimum purchase amount is 250 shares.

Are shares available to everyone?

Yes, the offer is open to the public.

Is this a legitimate process?

Yes, this is a legitimate process.

What happens if my application is unsuccessful?

If your application is unsuccessful, you will be refunded 100% of your original investment. Payments for refunds will be done on the 25th of November 2019.