By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)- Absa Capital, the Corporate and Investment Banking Division of Absa Bank Limited South Africa Monday listed its NewGold Exchange Traded Fund (ETF) on the Floor of the Nigeria Stock Exchange (NSE) in Lagos Nigeria at the price of N2,526.00.
The Company listed 400,000 NewGold shares on the Nigeria’s Exchange; making it the third African Country to list the NewGold ETF; the others are South Africa and Botswana.
This is South Africa’s largest ETF and fourth largest Gold ETF in the world.
Temi Ofong, Managing Partner at Absa Capital said the Nigerian listing is expected to help develop the investor Market in one of Africa’s fastest growing economies by widening the choice of Asset Classes available to Local investors, as well as to increase significantly liquidity on the Nigeria’s Exchange.
“NewGold has also proven to be one of the best performing ETFs in South Africa over five years, with a one year annualised return of 41.49 percent (41.49%), two year return of 26.02% and return over three years of 18.92%,” he said.
According to him, in year 2010, NewGold became the first ETF to list on the Botswana Stock Exchange. “This Market has shown significant growth in the past year; with Pension Fund Managers investing P191.9 million in the ETF in an effort to benefit from the rising price of Gold” Ofong said.
On his part, Oscar Onyema, Chief executive Officer (CEO) of the Nigeria’s Exchange said this is the first of many Exchange Traded Funds to come. “Several other applications have been received and are being considered,” he said.
Today marks a milestone in The Exchange’s commitment to the rebirth and growth of the Nigerian Capital Market. The launch of Exchange Traded Funds (ETF) is one of many steps we have outlined as part of our plan to bring to fruition our new vision, which is to become the gateway to African Markets (take note, South Africa),”Onyema said.
He affirmed and quoted McKinsey & Co. -Financial Times of August 16, 2011; that Global ETF Assets under management may grow from the present figure of $1.5 trillion to as much as $5.0 trillion by the end of 2015, and International Fund Managers are pointing to Emerging Markets as the investment destination to beat in 2012, because of the Eurozone crisis on one hand and the rising domestic consumption, increasing infrastructure projects and overall economic growth in Emerging Markets.
“The NSE is positioning itself to benefit from the projected growth of the ETF Market. The Exchange is also using the ETF product category to open up cost-effective diversification opportunities for investors, while giving the Broker-Dealer Community a tool to better service their clientele,” the NSE CEO said.
According to Onyema, the NewGold ETF offers investors a new investment opportunity -securities backed by gold bullion; “the NewGold ETF is the third largest Gold ETF in the world, the first in West Africa and the first in Nigeria. I am quite certain that our partners here at the Exchange will educate their clients on the various latent and obvious benefits of this product. I am also certain that NewGold is the first of many Exchange Traded Products we will see listed and traded on the floor of the Nigerian Stock Exchange,” he said.
Absa Capital is expected to work with Vetiva Capital Management Limited, Member of the Nigerian Stock Exchange on the NewGold ETF.
