Lotus Capital opens subscription for new Halal ETF

28 days to go Monday 18th August 2014 Lotus Capital opens subscription for new Halal ETF Daily Cover NIGERIA: On Friday the 15th August 2014, Nigeria-based investment management firm Lotus Capital confirmed to Islamic Finance news (IFN) that final regulatory approval for the firm’s new traded fund, the Lotus Halal Equity Exchange Traded Fund, had been received from Nigeria’s Securities and Exchange Commission (SEC). The ETF, Nigeria’s third, will be one of the country’s few non-interest capital market products. The new fund will track the NSE-Lotus Islamic Index (NSE-LII), which charts the performance of 15 screened equities listed on the country’s exchange including Cadbury Nigeria, Dangote Cement and Unilever Nigeria. Speaking exclusively to IFN, Hajara Adeola, the managing director of Lotus Capital, explained the company’s aim: “The launch of this new ETF is in line with our commitment to provide alternative ethical investment solutions in Nigeria. The new product will not only develop the capital market by increasing the diversity of instruments available, it will also increase the investment options available for investors seeking to invest in only ethical or Shariah compliant products.” Subscription of the ETF’s 100 million units, at an indicative unit price equal to 1/200 of the value of the NSE-LII on the day prior to the offer of subscription, opened on the 15th August 2014 and is projected to close on the 11th September. Investors have the option of subscription via cash or in-kind subscription exchanging stocks of the constituent companies of the NSE-LII for units of the fund. “Interest has been strong,” Adeola revealed. “We expect that the offer will be fully subscribed. We expect that both foreign and local institutional investors and fund managers will take advantage of the offer to diversify their portfolios.” With a Muslim population of around 88 million, Nigeria’s Shariah compliant finance industry continues to grow and its development is supported by the government. In 2013, the SEC established a Non-Interest Capital Market 10-year Masterplan Committee, chaired by Adeola, to develop strategies to foster the Shariah compliant sector. The country’s debt management office has given a timeframe of three years for a debut Nigerian sovereign Sukuk. 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