NewPlat to reduce platinum oversupply in S.Africa - CNBC Africa

NewPlat to reduce platinum oversupply in S.Africa


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“We have spoken to a few of the mining companies and I think they are very positive on the product because there is a potential impact of switching from platinum stocks into platinum,” Nedeljkovic, the head of investments in corporate and investment banking at ABSA told CNBC Africa on Tuesday.  

Absa’s NewPlat Exchange Traded Fund (ETF) issued by NewGold Issuer Limited, offers one the opportunity to invest in platinum. The ETF issued 54 million rand worth of stock which shows a hunger for the physical product.

It has also become the second largest platinum ETF in the world in the ten weeks since it was listed.

“It has been very successful. We’ve basically done in 10 weeks what the currently biggest platinum ETF globally has done in two years. There is a huge interest, especially in the institutional space for the platinum product. I think even we were surprised with the speed of the take-on,” said Nedeljkovic.   

“Some analysts are of the view that there was a bit of an oversupply of platinum in the market and what I think this product has done, lots of that oversupply has been picked up by the market,” he added.

NewPlat now holds a quarter of all platinum ETF reserves and Nedeljkovic maintained that most of the demand has come from within the country.

“In South Africa we have a depth of knowledge and expertise in platinum and I think there is an element of from the platinum miners into platinum. What we’ve done with taking the amount off the market is definitely going to be positive for the price of platinum.”