NSE EYES OPPORTUNITIES IN N800TRN ETF MARKET
BY MICHAEL EBOH
The Nigerian Stock Exchange, NSE, said it has put machineries in motion to harness the opportunities inherent in the Exchange Traded Fund, ETF, market, projected to hit N800 trillion ($5 trillion) by 2015.
The NSE also listed the first ETF in the Nigerian capital market - ABSA NewGold Exchange Traded Fund on its Daily Official List.
Speaking during the listing in Lagos, of 400,000 debenture units of the gold-backed ETF at a Net Asset Value of N2,526 per unit, Chief Executive Officer of the NSE, Mr. Oscar Onyema, said the NSE is envisaging a growth in the global ETF market in the years ahead with a positive spill over effect in emerging markets.
To this end, he noted that the NSE is positioning itself to benefit from the projected growth of the ETF market.
He pointed out that the NSE will use the ETF product category to open up cost-effective diversification opportunities for investors, while giving the broker-dealer community a tool to better service their clientele.
Onyema said, 'According to a report by McKinsey & Co, Global ETF assets under management may grow from the present figure of $1.5 trillion to as much as $5 trillion by the end of 2015.
'Also, international fund managers are pointing to emerging markets as the investment destination to beat in 2012, because of the Eurozone crisis on one hand and the rising domestic consumption, increasing infrastructure projects and overall economic growth in emerging markets.'
On the benefits of the product, Onyema explained that NewGold ETF offers investors new investment opportunity.
He said NewGold ETF is the third largest Gold ETF in the world, the first in West Africa and the first in Nigeria, offering investors the opportunity to be able to invest in securities backed by gold bullion.
'I am quite certain that our partners here at the NSE will educate their clients on the various latent and obvious benefits of this product. I am also certain that NewGold is the first of many Exchange Traded Products that we will see listed and traded on the floor of the NSE.
Also speaking, Managing Partner, Absa Capital, Mr. Temisan Ofong, said the inclusion of the NewGold ETF on the NSE allows both individual and institutional investors direct access to an efficient and cost effective means to invest in gold through a listed security.
He noted that the Nigerian listing is expected to help develop the investor market in one of Africa's fastest growing economies by widening the choice of asset classes available to local investors, as well as to increase significantly the liquidity on the NSE.