Barclays assures investors on NSE gold stocks after Africa unit sale

Barclays Bank of Kenya (BBK) says the sale of the lender’s Africa unit will not affect gold securities listed in the Kenyan market.

Head of Markets Anthony Kirui said Thursday parent company Barclays PLC was only reducing its shareholding in Barclays Africa from 62.3 per cent to a minority stake over time.

He added that since the gold stock was based on the value of real gold, it would not be affected by the fortunes of the company that issued it.

“The value of the gold-based exchange traded fund is not linked to Barclays Bank Africa’s share price and the value can only be influenced by the prices of the physical gold and the exchange rate,” said Mr Kirui.

Barclays launched the first exchange traded fund (ETF) in East Africa with the listing of the Barclays NewGold ETF at the Nairobi bourse. The ETF is the largest in Africa with a value of about $1.4 billion (Sh144.4 billion) and has made 400,000 units available to investors in Kenya.

It allows investors to indirectly own gold at a minimum trade of 100 shares and is expected to help diversify portfolios from equities and bond markets. The ETF was launched at a price of Sh1,250 and is tax exempt.

Mr Kirui said the reception in Kenyan capital markets was encouraging and they hoped pension and fund managers would get their trustees on board soon.

He also said retail investors had shown interest in the ETF.

Besides the commodity ETF, market players can also offer index ETFs that track the prices of a basket of stocks, bond ETF that tracks a debt and single stock ETFs.