Analysing the impact of cross-listing on firm value for Johannesburg stock exchange companies listed on the Namibia stock exchange

When companies are looking to raise funds for growth and increasing firm value, equity and debt are the only options at their disposal. In raising equity, companies can sell their stock to the public, within their domestic market or through cross-listing on another stock exchange which may be domestic or foreign. Accordingly, research on the impact of cross-listing on liquidity and firm value in the African context, has been growing. However, in Namibia there has been no study that comparatively assessed the impact of cross-listing on firm values of both cross-listed and locally listed stocks. Therefore, this study analysed the asset value, liquidity, and profitability of locally listed and cross listed assets on the Namibia Stock Exchange (NSX). The study used secondary data from publicly available financial indicators from 32 NSX listed companies in the period 2019 to 2021. The study found that the average 1isting time on for stocks on the NSX was 15.78 years. The findings also showed that 86.5% of the stocks were listed on the NSX Main board, of which 45.9% were cross listed and 40.5% were locally listed. The findings indicated that the cross listed stocks on the Capital Development Board (DevX) had the lowest Market Capitalisation averaging N$4 l 4 million. The average asset values of cross-listed firms were at least 4.5 times the value of those locally listed. The study also found statistically significant differences between locally listed and cross-listed assets, with respect to financial performance indicators like Asset value, Market capitalisation, 3-Year Beta and liquidity. While there were no significant associations with respect to Return on Shareholder Funds. The study concluded that cross-listing in the Namibian context can be grouped into two types, one which is inclined inwards and another one outward. The inward cross-listing is recommended for those companies seeking to raise local funds through the NSX, while the outward cross-listing is recommended for local firms looking to raise capital or increase their stock value by listing on the JSE Africa Development board

Grantor dc:publisher

University of Namibia

Year dc:date.issued

2021

Author dc:creator

• Mbangula, Konrad Ndapopi

• Cross-listing
• NSX
• JSE
• Firm value
• Profitability
• Liquidity

Language dc:language.iso

en

Handle dc:identifier.uri

http://hdl.handle.net/11070/3779

OAI identifier oai:identifier

oai:repository.unam.edu.na:11070/3779