Sterling Bank replaces Total in NSE-30 index

…as NSE reviews composition of market indices

The Nigerian Stock Exchange (NSE) has released the results of its bian- nual review for the NSE 30 and the five Sectoral Indi- ces – the NSE Banking, the NSE Consumer Goods, the NSE Oil & Gas, the NSE Industrial and the NSE In- surance.

The composition of these indices after the re- view will be effective from tomorrow Wednesday July 1, 2015.

In the NSE-30 index, Sterling Bank plc will re- place Total Nigeria plc; Wema Bank plc will be replacing Unity Bank plc in the NSE Banking index; while Prestige Assurance plc replace Staco Insur- ance plc in the NSE Insur- ance index.

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 de- veloped four sectorial in-dices with a base value of 1,000 points, designed to provide investable bench- marks to capture the per- formance of specific sec- tors.

The sectorial indi- ces comprise of the top 10 most capitalised and liquid companies in the Banking, Insurance and Food/Beverage & Tobacco (now Consumer Goods) sectors and the top five most capitalised and liq- uid companies in the Oil & Gas (Petroleum Market- ing) sector.

The indices, which were developed using the market capitalization methodology, are rebal- anced on a biannual basis -on the first business day in January and in July.

The Stocks are selected based on their market cap- italization from the most liquid sectors.

The liquid- ity is based on the number of times the stock is traded during the preceding two quarters.

To be included, the stock must be traded for at least 70 percent of the number of times the market opened for busi- ness.

The Exchange was not oblivious of the fact that the number of the stocks included in some of the indices may be inappro- priate for optimal portfolio diversification; however, the numbers would be reviewed as sector condi- tions change.

The Nigerian bourse began publishing the NSE 30 Index in February 2009 with index values avail- able from January 1, 2007.

On July 1, 2008, The NSE developed four sectoral indices and one index in 2013, with a base value of 1,000 points, designed to provide investable bench- marks to capture the per-formance of specific sec- tors.

The sectoral indices comprise the top fif- teen most capitalised and liquid companies in the Insurance and Con- sumer Goods sectors, top ten most capitalised and liquid companies in the Banking and In- dustrial Goods sector and the top seven most capitalised and liquid companies in the Oil & Gas sector.

The compiler of the in- dices maintains the right to modify the circulated selection above in con- nection with any mergers, takeovers, suspension or resumption of trading or any other company struc- ture changes during the period before the effective date of the annual review.