The Ghana Stock Exchange will see the listing of its first commodity backed Exchange Traded Funds on Wednesday, following the decision of South African group, Absa Capital, to list its gold-backed ETFs to help broaden the range of securities on the bourse.
This makes the Ghana Stock Exchange the fourth to list the NewGold ETFs after primary listing in South Africa and other listings on bourses in Nigeria and Botswana.
The fund will open on an initial offering split into 400,000 units, to test demand in the market before future possible expansion.
Kofi Yamoah, Managing Director, GSE said the listing on the bourse will help diversify the stock exchange away from the equities and bonds that currently dominate it.
"It is a means to deepen and broaden the security types that are available and traded on the bourse,” he said, adding that the listing will also provide the learning platform for the development of other ETFs in the future.
Besides, he said it would help boost capacity of dealers, fund managers and other market players.
Dr. Vladimir Nedeljkovic, Head of Investments at Absa Capital, said in a statement.
that the ETFs would help investors willing to invest in multiple shares or assets.
“The introduction of Exchange Traded Funds to the GSE offers both individual and institutional investors a cost efficient and convenient way to invest in multiple shares or other assets, such as commodities, through a single security,” said.
“We have been encouraged by the success of the NewGold ETF in the African markets where it has been listed. Africa is an exciting proposition for this product and we will continue to explore opportunities across the continent,” said Dr. Nedeljkovic.
NewGold, Africa’s largest ETF, is the best performing ETF on the continent over five years, with a return of 22.55% per year, a two year return of 24.76% and a return over three years of 21.66%.
As at 1 August 2012, NewGold’s assets under management were US$2.15 billion. NewGold is the only gold-backed ETF on the continent and is a simple and cost effective way of investing directly in physical gold bullion through a GSE listed share.
The listing is in line with Absa Capital’s overall strategy to expand its suite of products and services in sub-Saharan Africa.
