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Investors urged to take advantage of Stanbic IBTC ETF 30

By BusinessNews Staff on September 23, 2014

Chief Executive Officer, Stanbic IBTC Asset Management Limited, Mr. Olumide Oyetan, has advised investors to take advantage of its on-going N1 billion initial public offer for the Stanbic IBTC Exchange Traded Fund (Stanbic IBTC ETF 30) to invest in a low cost instrument that will deliver the required market return from the NSE 30 Index of the Nigerian Stock Exchange (NSE).

Oyetan, who gave the advice while speaking at an investors forum in Lagos, said application has been made to the NSE to admit the Fund in its daily official list and would be listed for secondary market transactions as soon as the necessary regulatory approvals are secured.

The Stanbic IBTC ETF 30 was designed to track the performance of the NSE 30 index, which comprises the top 30 companies listed on the NSE in terms of market capitalisation and liquidity. The index serves as the flagship benchmark for the stock market as it represents 92 per cent of the NSE’s market capitalisation and will replicate the price and yield performance of the index.

SIAML is currently offering 10 million units of the Fund at N100 each at par to investors. Application for the offer opened on Monday, 15 September 2014, and is scheduled to close on Wednesday, October 15, 2014.

The offer, which has received approval from the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange, will have a minimum subscription of 10,000 units and multiples of 5,000 units thereafter.

Oyetan explained that investors could invest or dispose of units of the Fund by buying or selling in the secondary market or through creation and redemption of the units in the primary market, adding that creation and redemption of the Fund could only be done by the Fund Manager when it is in excess of 500,000 units.
He said the units of the Fund could be created or redeemed either in kind or cash or combination of both.

Listing some of the underlying benefits, the SIAML boss explained that investing in the Fund represents an efficient means of acquiring all of the securities, included in the NSE 30 index, compared to investing in each individual stock.

He added that at any time during the trading day, an investor could execute a single ETF trade and immediately obtain broad exposure to the group of securities in the index, which span across different sectors.

“To further facilitate liquidity, the Fund will have a Market Maker, whose function will be to continuously offer to buy and sell units of the Fund on the floor of the Exchange”, he clarified.

[This Day]

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