The Nigerian Stock Exchange (NSE) has listed Lotus Halal’s maiden Shariah compliant equity exchange traded fund (ETF) worth NGN620 million (US$3.5 million). The non-interest finance company said the Lotus Halal Equity ETF was targeted at ethical investors and the daily price movement would be determined by the forces of demand and supply.
Speaking at the listing, Damilola Ajayi, the managing director of Vetiva Fund Managers, said investors who chose not to trade on the secondary market, may purchase/sell units of Lotus Halal Equity ETF securities through the process of creation/redemption, subject to a minimum creation/redemption value threshold of a block of ETF units. The Islamic finance company affirmed the NSE-Lotus Islamic Index (NSE LII) launched in 2012 and at inception was made up of 15 liquid and high capitalized stocks with strong fundamentals would help track the performance of these stocks.
NSE LII is an equity index that tracks the performance of a basket of carefully selected Shariah compliant equities listed on the floor of the exchange. According to the firm, the 15 screened Shariah compliant equities that comprised the NSE LII included beverage makers Cadbury Nigeria and Nestle Nigeria, soap manufacturers PZ Cussons Nigeria and Unilever Nigerian, cement companies Dangote Cement, Ashaka Cement, and Cement Company of Northern Nigeria.
This is a development that will positively impact the Nigerian Islamic finance industry. It will boost the confidence of operators in the industry by providing them with the option of having some selected companies in which they can invest that is screened as Shariah compliant. It will offer investment opportunities to local investors who are conscious of their religious or ethical teachings. Lastly, this will help generate more funds for the Islamic finance industry by way of deposit from the ETF.
Auwalu Ado is an internal Shariah auditor at Jaiz Bank. He can be contacted at
[email protected]
.
[email protected]
.