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Barclays launches first Exchange Traded Fund (ETF) in Kenya

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JEREMY-AWORI-BBK
Barclays Bank of Kenya Managing Director

Investors within Kenya and indeed, the wider East African region now have an opportunity to trade in ETFs following the launch and listing of the Barclays NewGold ETF on the Nairobi Securities Exchange (NSE) this morning. The NewGold ETF which is also listed on the Johannesburg Stock Exchange (JSE) enables investors to invest in an instrument which tracks the price of Gold Bullion. ETFs are based on the real time value of the underlying asset they track.

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.

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It will trade in the same manner as a normal equity security and will be subject to similar tax treatment and will be Kenya Shillings (KES) denominated.  The NewGold ETF price will be based on the KES equivalent of the prevailing international market price of gold (in USD).

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. Its value is dependent on the fluctuations in the underlying currency price of gold bullion. It will trade under the abbreviated name: “BARCLAYS NEWGOLD ETF” and NSE symbol: “GLD”.

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“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.

Kenya becomes the 7th market within the Barclays Africa Group to launch this exciting proposition, which, valued at approximately USD 1.4Billion is the largest Gold ETF in Africa and the 7th largest in the world. 400,000 units, valued at nearly half a billion shillings, will be available for this market at the time of the listing with the opportunity for growth, depending on demand.

Speaking at the launch, the Chief Executive of NSE, Mr. Geoffrey Odundo said “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.”

Adding that “The Exchange will continue to support the growth of the ETF market through our dedicated Business Development and Public Education program to see more investors participate in the market.”

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).

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