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Absa Capital to Launch South-Africa-Listed Palladium ETF


Absa Capital, the company behind the largest platinum exchange traded fund in the world, is set to launch a palladium ETF listed on the Johannesburg Stock Exchange on March 27.

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

The NewPalladium ETF will be physically backed by South African palladium.

“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 South African Reserve Bank classifies the new Absa ETF as a domestic investment, which will help attract institutional investors who have limits on their assets in foreign investments.

South Africa is the world’s second-largest palladium producer behind Russia.

Palladium is primarily used for automobile autocatalysts to diminish toxic pollutants in exhaust gas.

Palladium is currently trading around $769 per ounce, rising about 7% so far this year. The U.S.-listed physically backed ETFS Physical Palladium Shares (PALL) has gained 6.9% year-to-date.

Prices on palladium bullion have been strengthening on mining disruptions and strikes in South African mines. Additionally, possible sanctions against Russia, the world’s largest producer of palladium, has also helped support palladium. [Palladium ETF Finds Favorable Catalysts]

Absa Capital is also the sponsor of the Johannesburg-listed NewPlat ETF (NGPLTJ.J) , the world’s biggest platinum ETF. [Platinum ETF Physical Holdings at Record High on S. Africa Strikes]

On Wednesday, Standard Bank announced it will be listing first South-Africa-listed palladium ETF Monday.

For more information on new product launches, visit our new ETFs category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.