NAIROBI, March 27 (Xinhua) -- Kenya on Monday launched a gold-backed Exchange Traded Fund (ETF), a first of its kind in East Africa.
Principal Secretary in the National Treasury Kamau Thugge told journalists that the NewGold ETF will be traded at the Nairobi Securities Exchange (NSE).
"The Kenya shilling ETF will be traded in the same manner as a normal equity security and will be subject to similar tax treatment," Thugge said.
The securities instrument will enable investors to invest in an instrument that tracks the price of Gold Bullion, he added.
Each NewGold security is equivalent to approximately one hundredth of an ounce of gold that is held in a secure depository on behalf of investors and is backed by physical gold.
The NewGold ETF is valued at 1.4 billion U.S. dollars but only 5 million dollars worth will be available at the NSE at the time of listing, with the opportunity for growth depending on demand.
Barclays Bank of Kenya Managing Director Jeremy Awori said that the NewGold ETF will introduce depth and range to the NSE.
"It will further entrench Kenya as the undisputed regional financial hub," Awori said.
The NewGold ETF was first listed in South Africa in 2004 but has since been launched in Botswana, Nigeria, Ghana and Mauritius.