JOHANNESBURG (Commodity Online): After the US launched its first palladium ETF recently, it is the turn of South Africa now South African stock exchange operator, JSE, will launch a platinum ETF soon. It is also looking to list an Africa ETF in South Africa, with blue-chip companies.
The first palladium-based ETF was introduced in US in January 2010, when the ETFS Physical Palladium ETF began trading near $43/share. The ETF closed out April at $54.80, a gain of 34% in just over three months.
The Africa ETF will be started in South Africa and trade blue-chip firms from other economies in Africa, such as Egypt, Kenya and Nigeria. Separately, JSE is also awaiting regulatory approval for the launch of the first dark pool in Africa, Block X.
The global economic crisis saw more investors dump equities in favour of safe-haven assets, a theme that has resurfaced in recent days as investors worry that Greece's debt problems could spread to other countries.
South Africa's largest ETF, Absa's NewGold, which invests directly in gold, has soared in value as gold prices hit record highs.
ETFs are listed and traded on a securities exchange and track an index, sector or commodity, offering medium to long-term investment returns with relatively little risk.
Africa ETF would be launched in South Africa and trade blue-chip firms from other big economies in Africa like Egypt, Kenya and Nigeria. The firms did not have to be listed on the JSE.
The JSE reported a slip in 2009 profits in March, but has hit record equity trading volumes since due to market volatility and more foreign interest in Africa's biggest economy.