Local investors will have a feel of trading gold when the much hyped New Gold ETF finally lists on the Botswana Stock Exchange (BS) next month.
The stock exchange said the multi billion NewGold Exchange Traded Fund or New Gold ETF, the third largest in the world, will boost liquidity, which is a major problem for the local bourse.
“The NewGold will be available as an additional investment instrument available at the BSE so as to give investors more options to choose from and increase the liquidity of the BSE,” said the exchange ahead of listing.
The exchange added that the NewGold Debentures, which is an ETF, is developed in association with World Council and it represents a new asset class for investors and a unique investment opportunity.
The NewGold debentures are securities backed by gold bullion, listed on and traded on the exchange and each NewGold debenture is initially valued at 1/100 of one fine troy of gold.
The BSE has held educational activities from June and has already briefed the media, brokers and retail investors.
The briefings were done by Vladimir Nedeljkovic, Head of ETFs and Index Products and Batsile Ngomane, Manager ETFs and Index Products.
Presentations are also made to the public.
NewGold is the┬áworld’s third largest ETF after Standard & Poor┬áworth 1,065 tons and Gold Bullion Securities at 128 tons.
“The idea behind this is that since┬áBotswana is not an efficient market, the best thing is to┬áimport liquidity into the country,” head of┬áProduct Development at BSE, Thapelo Tsheole┬átold The Telegraph earlier in the year regarding the secondary listing of New Gold’s┬áETF.
The product has a primary listing on the Johannesburg Securities Exchange (JSE).
The listing is done through a partnership between ABSA Capital and BSE so as to offer NewGold Bullion debentures to local investor and hedge against the US dollar and the movement of the pula┬ácurrencies.
Gold is a major medium of international exchange after the US dollar and has been able to withstand the┬ácurrent world’s economic crisis.
If everything goes according to plan, New Gold ETF will list on BSE by July 13, 2010.