NewPlat debuts on BSE
Keikantse Lesemela | Monday September 1, 2014 14:14
NewPlat is an instrument through which one can invest directly in physical platinum bullion through the Botswana Stock Exchange. NewPlat Securities are designed to track the price of platinum, and creates an investment tool enabling institutional and retail investors to invest in a listed security that is fully backed by platinum.
Speaking at the launch of NewPlat on Friday, ABSA Head of African Markets, and Mike Chriselis said they are sure the product will perform well in the market as it is already in high demand globally. “New Platinum is in high demand globally, so for Botswana markets we are sure it will perform extremely well as the market is easily accessible,” he said.
The product started trading at P1.40 per unit. He highlighted that platinum provides long-term investment stability, as it is a rarer commodity than gold or silver.
“The demand for platinum seems unlikely to deteriorate, due to the scarcity of the commodity and its use in both industrial processes and precious jewellery,” said Chriselis. The product is also backed by global demand in car sales.
Absa listed NewGold on the BSE in 2010, in what was the BSE first ETF.
Chrisels said New Platinum is the only ETF on the JSE that provides investors with the opportunity to obtain exposure to the Rand performance of platinum.
BSE stated that it has approved the listing of 400,000 NewPlat securities.
NewPlat will be Absa’s second ETF on the BSE after listing its NewGold ETF in 2010. The NewPlat will become the Botswana bourse’s third ETF after Nedbank Capital’s BettaBeta that listed in 2011.
The price of each NewPlat Security will be equal to the equivalent price of spot platinum price multiplied by the US$/BWP exchange rate. The product has been already launched in other markets such as Nigeria and Europe. ABSA markets Vice President Michael Mgwaba said the economic fundamentals for the platinum is good as the demand is growing by five percent year on year. “This is largely driven by high demand in car sales in Europe and China,” he said. Mgwaba said Botswana market would have a strong portfolio as the New Gold ETF has performed better than other Southern African markets.