Chief Executive Officer of Stanbic IBTC Asset Management Limited, Olumide Oyetan, has disclosed that the company will float more exchange-traded funds (ETFs) in 2015.
According to Mr. Oyetan, Stanbic will launch more ETFs because of the company’s commitment to making the Nigerian capital market less equity-based and to provide alternatives for investors.
Mr. Oyetan disclosed Stanbic’s plans to launch more ETFs during the recent listing of the Stanbic IBTC ETF 30 on the floor of the Nigerian Stock Exchange (NSE). Mr. Oyetan stated that Stanbic will launch new ETFs within the first half of 2015.
In September 2014, Stanbic IBTC launched a N1B IPO for the Stanbic IBTC ETF 30, offering 10M units of the fund at N100 per unit at par. The primary offer of the ETF had a minimum subscription of 10,000 units and multiples of 5,000 units thereafter.
The Stanbic IBTC ETF 30 was oversubscribed and Stanbic consequently listed 11.44M units of the ETF on the Nigerian Stock Exchange at N100 per unit. On the Stanbic IBTC ETF 30’s first day of trading, 42,000 units of the ETF, valued at N422,000, were traded.
Mr. Oyetan called on investors to take advantage of the Stanbic IBTC ETF 30, in order to capitalize on the Nigerian Stock Exchange by investing in a low-cost instrument that will deliver the required market returns from the Nigerian Stock Exchange (NSE) 30 Index.
The Stanbic IBTC ETF 30 is designed to track the performance of the NSE 30 index. The NSE 30 Index is an index that tracks the performance of 30 most-liquid stocks listed on the Nigerian Stock Exchange. The NSE 30 index is a capitalization-weighted index.
The NSE 30 index serves as the flagship benchmark for the Nigerian Stock Exchange, representing 92 percent of the market capitalization of the Nigerian Stock Exchange.
Mr. Oyetan explained that investors could invest or dispose of ETF units by respectively buying or selling in the secondary market; or through the creation or redemption, respectively, of ETF units in the primary market. He said that Stanbic IBTC Asset Management required a minimum transaction size of 500,000 units for the creation or redemption fund units in its primary market.
Oyetan added that fund units could be created or redeemed either in kind or cash or a combination of both.
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