Nigeria Exchange to List First Gold-backed Exchange Traded Fund (ETF)

(Reuters) – Nigeria’s bourse is to list its first exchange traded fund (ETF) on Monday, a South African gold-backed fund that will broaden the exchange’s range of products beyond equities and bonds, the stock exchange said on Friday.

NewGold, originated by South Africa’s Absa Bank Limited , has a primary listing in South Africa and before its Nigeria debut had one other listing on Botswana’s bourse.

The fund will open on an initial offering of 1.096 billion naira ($6.76 million), split into 400,000 units, to test demand before any possible expansion into something bigger, a source at the stock exchange told Reuters.

“You don’t want to list a million units and find out that it’s not trading. They (ABSA) are testing the waters with this and I am certain that this figure will go up based on the uptake,” the source said, adding that ABSA plans to expand the ETF around Africa, including in Ghana.

ETFs track equity or derivative indexes or a commodity but trade like a stock on an exchange, giving investors exposure to the underlying assets but at a much lower cost and with more short-term flexibility.

Listing on the Nigerian bourse, sub-Saharan Africa’s second-biggest, will increase liquidity for the security and help diversify the stock exchange away from the equities that currently dominate it, he said.

“We are trying to deepen and widen the capital market. We want to provide different products not just plain vanilla,” the source added.

“I see a lot of EFTs being listed earlier next year. We already have an application to list another equity-based ETF next year by a local issuer and they want … it by January.”

Nigerian equities have touched 8-year lows in recent weeks, dragged down by banking and oil stocks, as foreign investors spurn frontier markets and domestic funds to buy bonds in search of better yields.

The all-share index is down almost 20 percent so far this year from a gain of 19.67 percent achieved in 2011.

Regulators have been trying to diversify the bourse to position it as a regional trading hub rivaling South Africa.

The source at the stock exchange said some of the mutual funds in the country were considering converting their funds into listed ETFs. ($1 = 162.2000 naira) (Reporting by Chijioke Ohuocha; Editing by Tim Cocks and Jane Merriman)

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Comment by JamRockLady on December 28, 2011 at 10:02am: @GGGIAN1...I'm watching the development of this VERY CLOSELY.

Only time will tell.

It's time for Moors/Nubians, world-wide, to be complete self-reliant and free from being under the white man's thumb!

Comment by Mervin E Yearwood on December 28, 2011 at 1:48am

Comment by GGGIAN1 on December 24, 2011 at 6:38pm: THERE IS A LOT GOING ON FOR SURE.

FOOD FOR THOUGHT.

REMEMBER WHEN EVERYTHING WAS JAPAN?

THIS WAS IN THE LATE 80'S EARLY 90'S.

THEY EVEN BOUGHT THE WORLD TRADE CENTER AND OTHER PROPERTIES.

WHAT THEY DID NOT KNOW WAS THAT THEY WERE HAD AND THEY HAD TO SELL

BACK AT A HUGE LOSS.

I WONDER IF THIS IS WHAT IS INSTORE FOR CHINA.

USUALLY THOSE IN POWER DO MOVES TO STAY IN POWER.

INTERESTING INDEED.

Comment by Mervin E Yearwood on December 24, 2011 at 5:37pm: @ GGGIAN1 THIS IS DEEP THE OIL MONEY ETC. DO NOT TRICKEL DOWN TO THE LOCAL WORK A DAY NIGERANS,COULD LEAD TO NEW COLINIZATIONS NOT BY EUROPEANS IT MAYBE CHINESE !

Comment by GGGIAN1 on December 24, 2011 at 3:22pm: IT SEEMS TO BE SO@MERVIN.

STILL,

THERE IS ANOTHER FACTOR THAT MAY COME INTO PLAY.

THE PEOPLE MIGHT DO AN OCCUPY PROTEST OVER THERE

AND THEN I WONDER WHAT WILL HAPPEN ONCE/IF THAT IS DONE.

ALSO, AS THE LARGEST MUSLIM COUNTRY

ARABS WANT TO SEE NIGERIA MADE INTO SAMLLER COUNTRIES.

EGO, I GUESS.

Comment by Mervin E Yearwood on December 24, 2011 at 7:32am: @ GGGIAN1 I Think Nigeria is alining with China and South Africa .

The fact that the Euro and the U.S dollar have been rapidly declining will make war extremely hard but knowing big bro. they may come out with all guns blazing.

Comment by GGGIAN1 on December 24, 2011 at 2:46am: THE SAD THING IS

HIS HAS ALREADY BEEN COUNTERACTED WITH THE

VIOLENCE IN NORTHEN NIGERIA (JOS STATE).

IT IS A SO CALLED MUSLIM VS NON MUSLIM OVER THERE.

THAT IS BACKED BY YOU KNOW WHO.

IT WILL ALLOW YOU KNOW WHOTO

GO IN FOR A NEW WAR ON TERROR

ALLOWING THE CURRENCY TO BE DEVALUED AND THE GOLD LOOTED FOR

YOU KNOW WHO.

NOTICE THE TROOPS ARE BEING "SENT HOME."

FIYAH BURN BABYLON!!!!!!!!!!!!!

Comment by evolution on December 23, 2011 at 8:02pm: Once this happen the so call Jews are going to be in serious trouble, they will no longer control the gold markets. They need oil just like the rest of the world and they will have to fork out some gold from fort Knox to cover their purchases like everyone else.