The Capital Markets Authority has granted approval for the listing of the first Exchange Traded Fund in Kenya, to be issued by NewGold Issuer (RF) limited.
The company, incorporated in South Africa, will issue and list 400,000 Gold Bullion Debentures as a secondary listing on the Nairobi Securities Exchange main investment market segment. The value of NewGold ETF tracks the price of gold. The listing price of the ETF will be determined on the listing date, based on the real time cash market values of the gold price and the real time price of the Kenya Shilling.
An
ETF is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index
fund. Debentures are long-term securities yielding a fixed rate of interest, issued by a company and secured against assets. The move paves way for trading of gold at the NSE.
ETFs provide an opportunity for investors to diversify their investment portfolios to access international products.
“This is a critical milestone in positioning Kenya as a gateway for regional and international capital flows by developing creative products that promote investor confidence in regional products. This is a step toward Kenya becoming a choice investment destination”, CMA chief executive Paul Muthaura said.