Kenya’s first Exchange Traded Fund listed at the Nairobi Securities Exchange to enable local investors to use local currency to trade in gold has been received with excitement from pension funds and other institutional investors, an executive at Barclays Bank said Thursday.
Anthony Kirui, Head of Markets at Barclay Bank of Kenya, said the dual-listed Exchange Traded Fund, which is not a derivative listed at the NSE on March 27, the first such listing of its kind in East Africa, is gaining popularity among investors since the onset of the global financial crisis.
“Gold has become attractive as an alternative investment, which has increased its value,” Kirui told reporters and investors at an event in Nairobi to highlight the successes achieved by the Capital Markets Authority (CMA), the market regulator, which has approved introduction of new products recently.
The ETF operates like a normal equity trading system, allowing local and foreign investors to acquire gold stocks, which they can trade on the basis of 100 minimum shares each at about 10 U.S. dollars.
The Barclays NewGold ETF, which was first listed on the Johannesburg Stock Exchange (JSE) in 2004, is also considered compliant with the Sharia law and has been approved locally as sharia compliant.
“It is something that would benefit individual and institutional investors,” Kirui said.
Fund managers are gearing for the issuance of new Exchange Traded Funds to enable investors to trade in Index, bonds and the equities markets.
The New Gold ETF has a current value of 1.4 billion U.S. dollars and enables investors to own gold assets without having to directly pay for the cost of keeping the gold.
New Gold keeps the gold, which is mined from South Africa and purchased at the Rand Refinery. Enditem
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