Barclays Kenya head of markets Anthony Kirui. FILE PHOTO | NMG
Summary
- Barclays Kenya head of markets Anthony Kirui had said during the ETF’s launch that the firm expects the pickup of the product to be gradual.
- Given the fall in price of a troy ounce of gold during the week from $1,255.90 on Monday to $1242.10 on Friday, the price of the ETF unit was revised down to Sh1,235 per unit on Friday.
- To start off trading in the ETF in Kenya, Barclays will act as the first market maker, availing the units to other stockbrokers on behalf of interested buyers.
Trading in the Barclays NewGold exchange
traded fund (ETF) got off to a slow start last week, moving only 1,100
units in two sessions at a price of Sh1,250 a unit.
NSE
market data shows that the ETF, the first such instrument to be listed
on the Nairobi Securities Exchange (NSE), registered trades only on
Monday and Tuesday, when 900 and 200 units were sold respectively.
There were no trades in the last three days of the trading week for the ETF which was listed on Monday.
Barclays Kenya
head of markets Anthony Kirui had said during the ETF’s launch that the
firm expects the pickup of the product to be gradual, given that some
of the expected investors such as fund managers still have to educate
their trustees on the product so as to get approval to buy into it.
“Initially
it (uptake) will be gradual, but I expect that the market will build up
in time,” said Mr Kirui. The 1,100 units sold on Monday and Tuesday
fetched Sh1.375 million for the issuer at the prevailing price of
Sh1,250 per unit.
However given the fall in price of a
troy ounce of gold during the week from $1,255.90 on Monday to $1242.10
on Friday, the price of the ETF unit was revised down to Sh1,235 per
unit on Friday, even though no trade took place.
The
price of the ETF is determined by the prevailing price of gold—where one
unit is pegged on the price of a hundredth of a troy ounce of gold and
the prevailing shilling/dollar exchange rate.
It can therefore move up or down even if there are no trades being executed, unlike the case for equities.
To
start off trading in the ETF in Kenya, Barclays will act as the first
market maker, availing the units to other stockbrokers on behalf of
interested buyers.
These initial buyers can then trade
their units on the secondary market once the initial sales reach their
settlement cycle of three days.
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