NAIROBI, Kenya, Mar 28 – Kenya has listed its first Exchange Trade Fund ar the Nairobi Securities Exchange by Barclays.
The Barclays NewGold ETF is also listed on the Johannesburg Stock Exchange (JSE) and enables investors to invest in the real-time value of Gold through an instrument similar to stocks.
Director of Markets at Barclays Kenya, Anthony Kirui, says the EFT is traded in the same manner as a normal equity and will be based on Kenya Shilling equivalent of the prevailing international market price of Gold in US Dollars which is currently at Sh1,250.
“It’s like buying shares in a gold mining company, without factors such as management and industrial actions, with the share price fully dependent on market factors. EFT gives investors an additional portfolio to invest and also cushion against inflation and currency movements,” said Kirui.
Each NewGold security is equivalent to approximately 1/100th of an ounce of gold which is held in a secure depository on behalf of investors and is backed by physical gold.
Investors can also trade in their share certificates for actual Gold, with 400,000 shares equivalent to 10 bars – which is the total amount of units floated in Kenya valued at nearly half a billion shillings.
“NewGold ETF will introduce depth and range to the NSE further entrenching the Exchange as the undisputed regional financial hub and based on our interactions with brokers and fund managers the market is hungry for this product,” said Barclay Bank of Kenya Managing Director, Jeremy Awori.
The Barclays NewGold ETF is the product of NewGold Issuer (RF) Limited (the issuer) and its authorized representative or market maker in Kenya is the Barclays Financial Services Limited (BFSL), the stock brokerage subsidiary of Barclays Bank of Kenya.
The NewGold ETF was first listed in South Africa in 2004 as the 3rd gold ETF in the world. The first gold ETF was launched in the US in 2003. NewGold ETF has since been successfully launched in Botswana (2010), Nigeria (2011), Ghana (2012), Mauritius (2013) and Namibia (2014).
It will trade under the abbreviated name: “BARCLAYS NEWGOLD ETF” and NSE symbol: “GLD”.
“ETFs are a significant and highly successful product of financial innovation that are found in more developed financial markets. We are happy to add another new segment for investors to benefit from. ETFs allow investors to spread their risk, diversify their portfolio and have ease of purchase and exit,” said Chief Executive of NSE, Mr. Geoffrey Odundo.