ETN launched for investors interested in access to African companies

Standard Bank Group has launched a new equity index product that will provide direct investment access to companies in Africa, it has announced.

The banks said that the Standard Bank Africa Equity Index Exchange Traded Note (ETN) offers investors a cost effective and convenient way to access a broad range of listed companies that were active across Africa, excluding South Africa, Lesotho and Swaziland.

The Standard Bank Africa Equity Index Exchange Traded Note, which is a rand based investment, is listed and traded on the Johannesburg Stock Exchange, off Standard Bank's existing Blue Access platform, or R60 billion domestic medium term note programme. The investment tracks the Standard Bank Africa Total Return Index.

The Standard Bank Africa Total Return Index includes equities with their primary listing on African stock exchanges and on major stock exchanges outside Africa, but with their principal exposure to Africa.

Leanne Parsons, the head of equity markets at the JSE, said the newly launched product would help the JSE realise part of its Africa strategy and help local investors expand their horizons.

‘We're very excited. Once people understand the dynamics, we certainly think this is the kind of product that will fly in the market,’ Parsons said.

Standard Bank chief economist Goolam Ballim said that, with growth expected at 6% for 2011, Africa was a good investment destination. Macro situations such as price stability, external trade relations and economic integration had improved significantly on the continent over the past few years.

About 90% of the flows into the continent were currently of a ‘commercial nature’ and not in the form of aid or donations, Ballim added.