GSE to start listing Exchange Traded Funds in September

Accra, July 25, GNA – Barring any regulatory hitches, the Ghana Stock Exchange will see the listing of its first Exchange Traded Funds (ETFs) in September, this year.

Exchange Traded Funds are securities traded on exchanges like shares but linked to the combined value of a portfolio or basket of underlying assets such as shares, commodities or bonds.

It provides investors the opportunity to own units tied to the commensurate value of the underlying assets.

The Exchange is working with ABSA Capital to list the commodity-backed NewGold ETF, which is already listed on the Johannesburg and Botswana Stock exchanges.

Speaking at a presentation on the New Gold ETF by officials of ABSA Capital, Mr Ekow Afedzie, Deputy Managing Director, of the Ghana Stock Exchange, said the bourse would submit new listing and trading rules covering the ETFs to the Security and Exchange Commission for approval.

He said the current trading rules on the Exchange would not apply to the ETFs since they would be traded under a different regime hence the need to draw new rules.

Mr Afedzie said the move was in line with the exchange’s strategic plan, aimed to develop and introduce new products as part of a commercialization process.

He said ETFs would attract and diversify the investment options available to investors, enhance liquidity and also boost the revenue base of the Exchange.

Mr Afedzie said there would be continuous stakeholders’ consultations and education to deepen understanding of the ETFs.

Mr Byron Woods, Associate Principal ABSA Capital, said the NewGold was the first product in South Africa through which institutional and retail investors could securely invest in gold bullion with the added benefit of minimal administrative fees.

He said the commercial rationale behind the NewGold was to provide investors with the ability to invest in Gold Bullion without having to incur the challenges of directly purchasing and storing the gold.

“NewGold raises capital through the offer of securities in the form of Gold Bullion Debentures to the general public. The proceeds raised are used to purchase Gold Bullion,” he said.

Mr Woods said “The Bullion Debentures” would be listed in Ghana Cedis but will track a commodity priced in US dollars. “It could therefore act as a currency hedge against the fall of the cedi,” he added.