Initial public offer opened 23 February
Absa Capital, the investment banking division of Absa Bank Ltd, today announced the launch of South Africa’s first Shari’ah compliant equity-linked Exchange Traded Fund (ETF), further reinforcing its leading role in the domestic ETF market.
The initial public offering for the NewFunds Shari’ah Top 40 Index ETF opened on 23 February. The ETF will be listed on 6 April on the JSE Ltd (JSE).
The Shari’ah Top 40 Index ETF tracks the FTSE/JSE Shari’ah Top 40 Index jointly established by London’s FTSE International Ltd (FTSE) and the JSE. The Shari’ah screening of the index constituents is performed by Yasaar Ltd (Yasaar) using a two-step methodology.
Yasaar represents all major Shari’ah schools of thought, creating a best practice approach that has credibility across all regions of the Islamic world. The ongoing screening of the Shari’ah compliance of the ETF is conducted by Absa’s Islamic Banking Shari’ah Supervisory Board.
“The Shari’ah Top 40 Index ETF is a first for South Africa and will redefine the Muslim investment landscape in South Africa,” said Vladimir Nedeljkovic, Head of ETFs and Index Products at Absa Capital.
“This ETF is a cost efficient, transparent and easy to access investment product that conforms to the principles of Shari’ah law,” said Nedeljkovic.
Nedeljkovic said that he expects the product to be well received in a market that urgently requires more local Islamic investment products to service the estimated 400 000 Muslim households in South Africa.
“The Shari’ah Top 40 Index ETF provides investors with diversified exposure to the broad market through investing in one Shari’ah compliant ETF share and earning a market related performance.”
It also offers a credible Islamic investment opportunity aligning the South African Islamic investment market with global trends.
Absa Capital’s NewGold ETF, the largest ETF in the South African market, with approximately R9bn in assets, is also Shari’ah compliant after it was approved by the Shari’ah Supervisory Board.
Note to the editor:
About Absa Capital
Absa Capital, a division of Absa Bank Limited (Absa) and affiliated to Barclays Capital, is a leading South African investment bank with global reach, offering clients financing, risk management and advisory solutions in a wide range of currencies and structures across the globe.
About Absa Capital ETFs and Index Products
Absa Capital is a leading originator of exchange traded funds (ETFs) in the South African market. The investment bank listed and operates NewRand, the first ETF in South Africa based on a proprietary investible index (the NewRand Index, comprising rand hedge stocks with the highest correlation with the Rand/USD exchange rate), as well as NewGold, the first and only gold ETF in South Africa as well as the largest ETF in the SA market with R8.7 billion in assets under management.
Absa Capital ETFs are listed on the JSE Ltd and can be traded at any time throughout the course of the day. Typically, ETFs try to replicate a stock market index such as the FTSE/JSE Top 40 Index, a market sector such as resources or financials, or a commodity such as gold.
About Absa Islamic Banking
Absa Islamic Banking is a division of Absa Group Limited. It was established during 2006 based on the need to provide financial products and services that were suitable for each sector of Absa’s diverse customer base and to take advantage of the opportunity offered by the Muslim communities of South Africa and Africa.
Absa Islamic Banking differs from Absa’s conventional banking offering in that it operates according to the dictates of Shari’ah Law. The independent Shari’ah Supervisory Board oversees every aspect of this process and approves all products and processes to ensure that the end to end customer experience is fully Shari’ah compliant.
In addition to retail transactional and investment products, customised products also meet specific client needs. This level of customer responsiveness resulted in Absa Islamic Banking being awarded Shari’ah Deal of the Year by Islamic Finance news in 2006. During 2007 Absa Islamic Banking was awarded Best Islamic Offering from a Conventional Bank by World Finance magazine and was voted Best Islamic Bank in Africa for 2007 and 2008 by Islamic Finance news.
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