The Nigerian Stock Exchange (NSE) recently released the results of its annual full year market index review for the following indices – the NSE 30, NSE Lotus Islamic, NSE Pension, Corporate Governance Index, Afrinvest Bank Value Index, Afrinvest Dividend Yield Index, Meristem Growth Index, Meristem Value Index; and the five Sectoral Indices of The Exchange – NSE Banking, NSE Insurance, NSE Industrial, NSE Consumer Goods and NSE Oil & Gas.
The review led to the entry and exit of major companies from several indices which took effect on Monday, January 4, 2021.
The indices were developed to allow investors to follow market movements and properly manage investment portfolios. Designed using the market capitalisation methodology, the indices are rebalanced on a semi-annual basis on the first business day in January and in July.
Transnational Corporation of Nigeria Plc has replaced Julius Berger Nigeria Plc in the NSE-30 Index, the recently reviewed market indices show.
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Veritas Kapital Assurance Plc and African Alliance Insurance Plc replaced an exited Niger Insurance Plc in the NSE Insurance Index. In the NSE Oil & Gas Index, MRS Oil Nigeria Plc exited for Eterna Plc; while PZ Cussons Nigeria Plc has exited NSE Lotus Islamic Index. Also, Dangote Sugar Plc, FCMB Group Plc, United Capital Plc, Africa Prudential Plc, and AIICO Insurance Plc have exited the Afrinvest Div Yield Index.
Meristem Growth Index has new entrants like Access Bank Plc, Cadbury Nigeria Plc, Guaranty Trust Bank Plc, Julius Berger Nigeria Plc while BUA Cement Plc, Glaxo Smithkline Consumer Nigeria Plc, Okomu Oil Plc, and Wema Bank Plc have exited.
Stocks like Dangote Sugar Plc, and Total Plc have been admitted in the Meristem Value Index while Cadbury Nigeria Plc, Dangote Cement Plc, Fidelity Bank Plc, and UACN Property Development Company Plc exited.
The Nigerian bourse began publishing the NSE 30 Index in February 2009 with index values available from January 1, 2007. On July 1, 2008, the NSE developed five sectoral indices with a base value of 1,000 points, designed to provide investable benchmarks to capture the performance of specific sectors.
The sectoral indices comprise the top fifteen most capitalized and liquid companies in the Insurance and Consumer Goods sectors; the top ten most capitalized and liquid companies in the Banking and Industrial Goods sector; and the top seven most capitalized and liquid companies in the Oil & Gas sector.
In July 2012, the Nigerian bourse launched The NSE Lotus Islamic Index (NSE LII) which consists of companies whose business practices are in conformity with Shari’ah Investment Principles, with the aim of increasing the breadth of the market and creating an important benchmark for investments as the alternative ethical and noninterest investment space widened. The companies that appear on the Islamic Index have been thoroughly screened by Lotus Capital Halal Investment, in accordance with a methodology approved by an internationally recognized Shari’ah Advisory Board comprising of renowned Islamic scholars.
