Will NewPlat Securities match NewGold’s popularity?

The success of any stock exchange-listed product is judged by the amount of interest expressed by the market.

In 2010, a product called NewGold was listed on the Botswana Stock Exchange (BSE), marking the first entry of a product of its kind into the local bourse. NewGold, which tracks the price of gold and is backed by the metal itself, has so far proved to be a success because of its outstanding performance in comparison to other markets it is listed in. Its value is currently estimated at P300 million. It is this great success that led its ISSUER, NewGold Issuer, to the belief that there is a huge appetite from the local market for another product of its kind. Thus last Friday, a similar product called NewPlat Securities (which tracks the price of platinum) was listed on BSE.

“It is all about what the market wants, not what we want,” Exchange Traded Products Vice President of Barclays Africa, Michael Mgwaba told Gazette Business.
NewGold Issuer is a subsidiary of Barclays Africa. NewPlat is already currently listed on South Africa and Mauritius’ bourses, making BSE the third host. Mgwaba said its performance in South Africa is exceptional given that in just under a year of its listing, it managed to sell the biggest number of securities ever seen since any products were launched in Africa. He added that the strong performance is attributable to the long-term stability of platinum as a rare commodity.

His anticipation is that this stock’s performance on the Johannesburg Stock Exchange will be replicated on the BSE. Mgwaba explained that the performance will be two-fold: the first being that platinum itself has an impressive value in United States dollar terms; the second being that if the dollar-priced product is converted into a currency of any emerging market, it tends to perform better (because the currencies are normally weaker against the US dollar) and therefore yields high returns. NewPlat will be traded in pula. Mgwaba revealed that countries prefer to have a product trade in their local currency as it boosts such currencies and that this is a trend that has been observed in various countries.

Mgwaba spoke in glowing terms about the ease with which the listing was done, attributing this to his company’s close working relationship with BSE as well as other relevant authorities. He revealed that there are many more products that his company will interest the South African market in. Based on their performance, the company will explore the possibility of listing on BSE in the future.