Absa Capital launches two listed securities linked to Barclays Black Chips Index

01 October 2012 Absa Capital

Absa Capital, the Barclays affiliated corporate and investment banking division of Absa Bank Limited, today announced the launch of the Black Chips Protector and Black Chips Accelerator, referenced against the Barclays Black Chips Index. The Black Chips P

The launch is in response to investor appetite for access to financially robust offshore shares via a single rand-denominated term investment, with a choice of capital protection levels.

“We have seen a strong flight to quality driven by the uncertain global and local economic environment,” said Ryan Sydow, head of retail distribution at Absa Capital. “The Barclays Black Chips Index seeks to pick out the best stocks from across Western Europe, North America and Asia.”

The Barclays Black Chips Index employs quantitative measures to ensure investors participate in so-called ‘Black Chips’ - an enhancement of the ‘Blue Chips’ concept of widely regarded high quality stocks.

The companies included in the Black Chips Index are selected from a global basket based on their financial robustness, liquidity, debt to earnings levels and the amount of dividends they distribute. The index follows a specific investment mechanism defined in advance and governed by transparent rules, and is refreshed every three months to identify a new portfolio of quality stocks.

The specific selection of mechanisms seeks to identify quality stocks through the use of fundamental accounting metrics such as the Price Earnings ratio and the Return on Equity ratio.

“Based on these metrics, the mechanism removes the stocks showing least quality compared to their peers and avoids an explicit bias towards undervalued stocks,” said Vladimir Nedeljkovic, head of investments at Absa Capital.

“In launching the Black Chips Protector and Black Chips Accelerator, we have met the needs of investors by offering a relevant, unique and innovative solution that can be used as a building block to express tailored investment views,” said Nedeljkovic.

“Bringing the Black Chips Index to market illustrates the strength of harnessing the global expertise of Barclays for the benefit of South African investors,” said Sydow.

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