Absa Capital, a unit of South Africa’s Absa Group Ltd., said it may start the first gold- backed exchange-traded funds in Kenya and Nigeria.
“Absa Capital is in talks with the Nigerian Stock Exchange to potentially secondary list our NewGold exchange-traded fund,” Vladimir Nedeljkovic, the Johannesburg-based investment bank’s principal for ETFs and index products, said today. He is in Kenya to discuss starting the ETF in the East African nation.
NewGold, which has its main listing on South Africa’s JSE Ltd., is the largest gold ETF in Africa’s biggest economy, with more than $2 billion in assets. Earlier this year, Absa Capital, listed NewGold on the Botswana Stock Exchange.
Absa, South Africa’s largest retail bank and which is controlled by Barclays Plc, wants to expand in the continent to boost earnings. Absa Capital, which was launched in 2005 after the U.K. bank bought a stake in the lender, contributed more than one-fifth of Absa’s profit in the first half to June 2010.
In Nigeria, the NewGold ETF will develop the nation’s capital markets by improving liquidity on the bourse and bringing another asset class to the West African market, helping investors to “diversify their exposures,” Nedeljkovic said. “Our discussions with the NSE are in very early stages and we cannot provide any timing.”
ETFs trade like stocks, allowing investors access to commodities like gold and platinum without taking physical delivery of them.
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