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Stanbic IBTC subsidiary to inaugurate N1bn ETF

By BusinessNews Staff on August 28, 2014

Stanbic IBTC Asset Management Limited has finalised plans to float an Exchange Traded Fund, the Stanbic IBTC ETF 30, a move it said was aimed at further developing the country’s capital market.

An Exchange Traded Fund is an investment vehicle that tracks an index, a basket of assets, or a commodity but trades like regular shares on a stock exchange.

At the signing ceremony of the fund in Lagos on Tuesday, the directors of Stanbic IBTC Asset Management and other parties signed a deal to issue 10 million units of the fund of N100 each at par.

According to the asset management firm, the issue will open on September 15 and close on October 15, with the minimum subscription at 10,000 units and multiples of 5,000 units thereafter.

It also said the Securities and Exchange Commission and the Nigerian Stock Exchange had given their approvals for the registration and listing of the units of the fund, for which Stanbic IBTC Capital Limited will be the issuing house.

The Managing Director and Chief Executive Officer, Stanbic IBTC Asset Management, Mr. Olumide Oyetan, explained that one of the company’s goals in floating the fund was to attract investors to Nigeria’s ETF market by simplifying it for them.

He said, “The Fund represents a convenient and efficient way for investors to have access to the top 30 most capitalised and liquid stocks on the NSE, in a cost effective manner.

“We believe that it will appeal to sophisticated and institutional investors that believe in the growth story of companies listing the NSE and by corollary in the abundant growth opportunities that exist in Nigeria.”

Oyetan, who said the fund was meant to replicate as closely as possible the total return of the NSE 30 Index, explained that it would invest 100 per cent of its assets in the same portfolio of securities that comprise the NSE 30 Index in proportion to their weightings in the Underlying Index.

“The NSE 30 Index comprises of the top 30 companies in terms of market capitalisation. The index serves as the flagship benchmark for the stock market as it represents 92 per cent of the NSE’s market capitalisation,” he said.

Oyetan, who said ETFs were categorised as one of the fastest growing asset class globally, added that the Stanbic IBTC ETF 30 was designed to be very liquid.

“What we want to do differently is to ensure that this is a very liquid ETF and we want to ensure that people actually trade it on the stock exchange,” he said, stressing that the focus in the first instance was to ensure that domestic investors understand and participate in the market.

The Executive Director, Haruna Jalo-Waziri, said the Exchange welcomed the development as the ETF space was one it had been working on for a long time.

He assured Stanbic IBTC of the Exchange’s support as it steps into ETF market, noting that the group and the NSE already had a very good working relationship.

On her part, the Chief Executive Officer, Stanbic IBTC Capital Limited, Ms. Yewande Sadiku, commended the board of SIAML for working towards the deepening of the Nigerian capital market through the listing of new and innovative products.

[Punch]

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