Barclays Launches its Financial Services Division with Focus on Institutional Clients

Barclays Bank of Kenya has launched its stock brokerage subsidiary Barclays Financial Services Limited (BFSL). The brokerage launches as part of Barclays Group of Africa (BAGL), with a pan-African stock broking operation of 330 staff.

The Kenyan brokerage will be bringing a range of new investment products and services to the country. The BFSL will be offering cash equity trading services, fixed income and bond trading, and derivatives trading, which will begin with the launch of the NewGold Exchange Traded Fund.

The NewGold ETF, which will be the first investment fund of its kind in the country, will allow Kenyans to invest in gold through the Nairobi Stock Exchange, gaining when gold prices rise – which typically happens when business investments are suffering price falls – through buying units in one of the largest gold funds in the world.

BFSL will be the first brokerage in Kenya to trade in Exchange Traded Funds, under the Nairobi Securities Exchange’s new rules, taking up a pioneering position in derivatives in Kenya, in which it has excelled in South and southern Africa.

“As a market maker for the NewGold ETF, which will be listed on the Nairobi Securities Exchange, we shall be broadening the options and service for Kenyan investors from the word ‘go’,” said Jeremy Awori, the Chief Executive Officer of Barclays Bank of Kenya.

“This is a strategy that will be driving successive roll outs of groundbreaking brokerage services by BFSL in Kenya.” He added.

The new brokerage will also be offering a key research portal, Barclays Live, providing world class global research, indices, data and analytical tools, and clients sector-based research, across agriculture, business services, commodities, financial institutions groups, global development organisations, healthcare manufacturing, transport and logistics.

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As a wholly bank-owned subsidiary, BFSL will also stand on uniquely solid ground as a brokerage, with assured healthy corporate governance, as well as active foreign desks in nine other African markets, being Botswana, Ghana, Mauritius, Mozambique, Seychelles, South Africa, Tanzania, Uganda and Zambia.

With its first roll out, of the NewGold ETF, BFSL will also be opening the way to exceptionally strong investment returns.

At the end of March 2016, investors in the NewGold ETF, which was first launched in 2004 in South Africa, had achieved investment gains of 25.44 percent over the previous year. Gold has delivered consistently higher returns than stock markets for the last eight years, since the global financial crisis of 2008.

The NewGold ETF also means investors can buy gold without having to physically store it, incurring lower taxes than physical gold and carrying lower risks than equity investments.

“The launch of the ETF will mitigate risks and widen investment opportunities for Kenyan investors, further positioning Nairobi as an African financial hub,” said Mr Awori.

Currently, Kenya is the third largest stock-market hub in Sub-Saharan Africa after the South African JSE and Nigeria’s SEC, but its move into ETFs is poised to make it an even more competitive investment hub.

BFSL is an investment bank licensed by the Capital Markets Authority and was admitted as a trading participant of the NSE in 2015. As a trading participant, BFSL is authorized to undertake stock brokerage activities in the NSE.

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