Stanbic IBTC’s ETF 30 to be Admitted into NSE List

Stanbic IBTC Asset Management Limited said its Exchange Traded Fund (ETF 30) would be admitted into the daily official list of the Nigerian Stock Exchange (NSE) soon.

Olumide Oyetan, chief executive officer, of the company, while speaking at the investors’ forum in Lagos, urged investors to leverage the bank’s on-going N1billion initial public offer for the Stanbic IBTC Exchange Traded Fund (ETF 30) and invest in a low cost instrument that will deliver the needed returns on investment.

He explained that application has been made to the NSE to admit the Fund in its daily official list, which would be listed for secondary market transactions as soon as the necessary regulatory approvals are secured.

The Stanbic IBTC ETF 30 was designed to track the performance of the NSE 30 index, which comprises the top 30 companies listed on the NSE in terms of market capitalisation and liquidity.

The index serves as the flagship benchmark for the stock market as it represents 92 per cent of the NSE’s market capitalisation and the will replicate the price and yield performance of the index.

The company is currently offering 10 million units of the Fund at N100 each at par to investors. Application for the offer opened on Monday, 15 September 2014, and is scheduled to close on Wednesday, October 15, 2014.

The offer, which has received approval from the Securities and Exchange Commission and NSE, will have a minimum subscription of 10,000 units and multiples of 5,000 units thereafter.

Oyetan explained that investors could invest or dispose of units of the Fund by buying or selling in the secondary market or through creation and redemption of the units in the primary market, adding that creation and redemption of the Fund could only be done by the Fund Manager when it is in excess of 500,000 units.

He said that units of the Fund could be created or redeemed either in kind or cash or combination of both.

Listing some of the underlying benefits, he pointed out that investing in the Fund represents an efficient means of acquiring all of the securities, included in the NSE 30 index, compared to investing in each individual stock.

He added that at any time during the trading day, an investor could execute a single ETF trade and immediately obtain broad exposure to the group of securities in the index, which span across different sectors.

“To further facilitate liquidity, the Fund will have a Market Maker, whose function will be to continuously offer to buy and sell units of the Fund on the floor of the Exchange. Investing in the Fund will reduce the complexities associated costs and risks of investing directly in underlying shares.

“Compared to mutual funds, the Fund will not charge a fee when an investor acquires or divests its units since such a transaction would happen on the floor the Exchange,” he said.

He added that the Fund is expected to earn dividends from securities held and would pay out substantially all of its net earnings to its unit holders.