Kenya launches first gold ETF

Kenya has made history in East Africa with the launch of its first gold-based exchange-traded fund (ETF). The NewGold Issuer RF Limited has listed an ETF to track the price of gold bullion at the Nairobi Securities Exchange. The Barclays New Gold ETF, which is a cross-listing from the Johannesburg Stock Exchange, will enable investors to invest in a debt instrument that reflects the real-time value of gold in the international markets. At the time of listing, the ETF was valued at $1.4 billion, making it the largest gold ETF in Africa and the seventh largest in the world. The listing of the Barclays New Gold ETF represents a significant milestone for the Nairobi Securities Exchange, positioning Kenya as an attractive investment destination in the region. By joining countries like Botswana, Nigeria, Mauritius, Namibia, and Ghana in offering gold ETFs, Kenya is diversifying its capital market products and increasing market liquidity. One of the key advantages of ETFs is their liquidity, low fees, and tax efficiencies, making them an attractive investment option for investors looking to diversify their portfolios. The collaborative efforts of regulatory bodies in Kenya have led to favorable legislation that supports the introduction of new financial products like the gold ETF. Barclays Bank Kenya's managing director, Jeremy Awori, highlighted the importance of strong leadership and collaboration in bringing innovative initiatives like the gold ETF to the market. The ETF is priced in Kenyan currency at 1,200 shillings per troy ounce of gold, with each share equivalent to approximately 1/100 of an ounce of gold. The physical gold backing the ETF is held in a secure depository in London and is insured, providing peace of mind for investors. The Sharia compliance of the ETF also opens up investment opportunities for Sharia investors, further expanding the market's reach. With the successful launch of the Barclays New Gold ETF, Kenya is paving the way for continued growth in the economy and the thriving of companies operating within the market. Overall, the introduction of the gold ETF in Kenya marks a significant step towards diversification and innovation in the capital market, showcasing the country's commitment to fostering a robust and dynamic investment environment.