KUALA LUMPUR: Malaysia’s first syariah-compliant Commodity Exchange-traded Fund (ETF) – TradePlus Gold, made its debut on the Main Market of Bursa Malaysia yesterday at RM1.73 per share, for a premium of 1.5 sen, over its initial public offering (IPO) price of RM1.715 with 2,000 units traded.
The stock was traded under its short name of ‘GOLDETF’ and stock code ‘0828EA’, tradable with a minimum lot size of 100 units.
The fund closely tracks the returns on gold, as at least 95 per cent of the ETF’s net asset value would be invested in physical gold bars and the balance in Islamic money market instruments and Islamic deposits.
Affin Hwang Asset Management Bhd (Affin Hwang AM), which is the domestic manager for the fund, together with AIIMAN Asset Management Sdn Bhd (formerly Asian Islamic Investment Management), as the external fund manager, spent about RM20 million to create the Tradeplus Gold unit.
Affin Hwang AM managing director Teng Chee Wai said the fund targeted a participation ratio of 67 per cent from among institutional investors and the remaining being retail investors.
“We believe this gold asset class does provide convenient diversification opportunity for institutional investors’ portfolio, a safe haven during times of financial uncertainty.
“From a fund size of RM20 million, we hope it will grow in a year to hit RM100 million. Gold is consolidating at its bottom now,” he told a press conference after the listing exercise of TradePlus Gold here yesterday.
Certified by Amanie Advisors, the investment structure required each unit of the fund to be physically backed and segregated on an allocated basis in a secure vault.
Investors are provided with an option for physical redemption, subject to fees and charges, for a minimum redemption unit block of 500,000 units which was equivalent to an estimate 5kg of gold.
Earlier, Bursa Malaysia Bhd chief executive officer Datuk Seri Tajuddin Atan said this ETF would allow investors to buy and sell gold in the same manner as trading shares on Bursa Malaysia with ease, low cost and in a transparent manner.
“Bursa Malaysia has rolled out several initiatives to support ETF listing and trading, aimed at improving liquidity and vibrancy of the Malaysian ETF market, this includes, among others, a new market making incentive for ETFs.
“In addition, the government has also announced that ETF trading on Bursa Malaysia will be exempted from stamp duty starting next year.
“This is set to spur ETF trading activities even further,” he added. — Bernama