Dukia to trade gold bullion bars on Lagos Commodities Exchange

Dukia Gold & Precious Metals Refining Company Limited is set to commence the trading of fully refined London Bullion Market Association (LBMA) investment grade gold bullion bars, its derivatives and related products on the floor of the Lagos Commodities & Futures Exchange (LCFE).

This was disclosed at a virtual seminar just organised by the licensed precious metals mining & refining company and bullion merchant in conjunction with LCFE and the Ministry of Mines and Steel Development.

The virtual seminar was attended by member firms of the Pension Operators Association of Nigeria, licensed commodities exchange operators, commodities broking & trading firms and assets manager.

Minister of Mines and Steel Development, Olamilekan Adegbite, delivered the keynote address, while Dr Oyindasola Oni, the Chairman of the National Pension Commission, gave the goodwill message.

Managing Director of Dukia Gold & Precious Metals Refining Company Limited, Ms. Bose Owolabi, in her welcome address, stated that the seminar was one of the many initiatives along with other partners  conducted ahead of the introduction of the Dukia Gold Exchange Traded Certificate.

Managing Director of the Lagos Commodities & Futures Exchange (LCFE), Mr Akin Akeredolu-Ale, said the build-up to the virtual seminar on investing in gold started as far back as 2019.

He stressed that both the LCFE and Dukia Gold had long focused on how Nigerians could invest and trade in responsibly sourced Gold on a structured and regulated platform such as the LCFE.

He further expressed optimism that the Nigerian economy was taking off on a good note particularly  with the development of a commodity trading ecosystem particularly for the solid minerals sector, a move which he affirmed would further diversify the nation’s economy.

The minister, who was the chairman of the event, remarked that gold investment remained unique, time-tested wealth preservation instrument, thus creating a vehicle for Nigerians to build and preserve wealth over the long term.

He noted that Good Delivery Gold bars and their derivatives are unlike jewellery, ornaments or Raw Gold, are Investment grade Precious Metals (IPM), which are essentially financial assets that are actively traded, similar to financial instruments such as stocks and bonds.

Adegbite said it is such IPM product that a proudly Nigerian Gold and Precious Metal Refinery, the Dukia Gold and Precious Metals Refining Company Limited, one of the organisers of the webinar was introducing in Nigeria through the Lagos Commodities and Futures Exchange.

He urged participants and the public, who are discerning and desirous of owning gold assets, to proudly consider and invest in the investment grade products of Dukia Gold in order to add value to Nigeria’s precious metal value chain.

Chairman of the National Pension Commission (PENCOM), Dr Oyindasola Oni, highlighted the wish of the industry to have more investment grade financial instruments which would offer more diversifications of available financial assets, necessary to improve the portfolio results of pension funds and asset managers.

He noted that the demand for safe-haven assets by investors, following record-high global uncertainty on performance of the stocks and bonds market, was well documented.

He went on to point out the requirements of investment grade assets as stipulated within Sections 3, 4, and 5 of the regulations on the Investment of Pension Fund Assets.

These sections, he said, specified the authorized markets, allowable instruments and minimum quality requirements for investment instruments/securities to qualify for pension fund investments.

He said, “Investment of pension assets in gold instruments, therefore, depends on compliance with these requirements; needless to reiterate that the safety of pension assets remains a fundamental objective of pension fund investments.”

According to him, pension fund operators play a critical role as institutional investors in developing the financial market.

He particularly charged the PFAs to give serious considerations to investing part of the almost N14 trillion in their coffers in investment grade gold bullion bars, an investment option which Dukia Gold is promoting through its DGETC.

Oni made this charge against the backdrop that the rapid growth of the pension assets had not seen corresponding increases in investment outlets within our domestic market, adding that the government had been the largest beneficiary of pension funds investment with more than 61 per cent  of the accumulated assets devoted to it.

Two key lecture presentations to enlighten participants on the benefits and implications of investing their assets in investment grade gold were made by Mrs Morohunke Bammeke, a former managing director of PAL Pensions and Mr David Adeyinka, an investment analyst, based in the United Kingdom.

The two speakers spoke on the benefits which investments in good delivery gold bars meant for investors in terms of wealth preservation, reliability and assurance of non-depreciation of the value of assets held in LBMA-grade gold bars even during turbulent economic times.

Both speakers supported the view that gold was traditionally used by investors to hedge against inflation, currency risks and systemic risks that might affect entire financial markets such as the Covid-19 pandemic and the 2007/2008 financial crisis when gold returned over 31 per cent price appreciation.

This, they stressed, was because dold investments had traditionally exhibited negative correlation with stock markets and tend to do better in times of financial crisis.

The presentation of the DGETC was made by Mr Seun Osomo of Vetiva Securities, who referred to this unique exchange-traded gold-backed product as a game changer.