March 20, 2014 / 4:21 PM / 6 years ago

UPDATE 1-Absa Capital to launch palladium ETF on March 27

* Second palladium fund announces Johannesburg listing

* Product will be backed by South African palladium (Adds background, comment)

By Jan Harvey

LONDON, March 20 (Reuters) - Absa Capital said on Thursday it will launch its long-awaited palladium exchange-traded fund on March 27, the second such product to be announced as listing in Johannesburg this week.

“We’ll be listing the fund on Thursday,” Absa’s head of exchange-traded products Vladimir Nedeljkovic said.

Absa already operates the world’s largest platinum-backed ETF, NewPlat ETF, which listed in April last year. Within four months it had grown to be the biggest fund of its kind in the world, currently holding more than 944,000 ounces of metal.

The new product, NewPalladium ETF, will be fully backed with South African palladium, Absa said. The republic is the world’s second largest producer of the metal - primarily used in autocatalysts - after Russia.

“We’ve secured supply of the metal, and we can start trading immediately,” Nedeljkovic said. “We’ll abide by the South African Reserve Bank ruling that the metal has to be produced in South Africa.”

The Absa fund, like NewPlat, is classified by the South African Reserve Bank as a domestic investment, Absa added. That may make it more appealing to institutional investors, who can hold only a proportion of their assets in foreign investments.

Palladium prices hit session highs at $770 an ounce on Thursday after the listing of the fund was announced. Spot palladium is up 7.6 percent this year, largely on the back of fears that a stand-off between Russia and the West over Ukraine could escalate, affecting supply.

Precious metals backed exchange-traded funds, which issue securities backed by physical metal, have proved a popular way to invest in the sector in recent years.

Standard Bank said on Wednesday it was set to list South Africa’s first palladium ETF on the Johannesburg Stock Exchange on Monday. (Reporting by Jan Harvey, editing by David Evans)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below