Economy
How are USA 500 Stocks Selected?
While USA 500 may include only a small section of publicly traded firms, there is no doubt that it is one of the most important indices in the United States stock market.
Approximately 500 companies in the S&P 500 make over 80% of the stock’s total value on the market. Therefore, it is an important indicator of how the local market is performing.
If you target trading USA 500 stocks, one of the main questions that you might have in your mind is, “How are the companies selected to join the exclusive list?” Everything comes down to meeting a number of rules set by the committee of investors, and we are going to look at some of them:
Market Capitalization
USA 500 was created to represent the largest companies in the US. So, size is an important parameter. The notion of “size” in the stock market means the selected company’s stock value or the total value of its shares (market capitalization).
Take the example of Apple Inc., an American multinational technology firm headquartered in Cupertino, California. In 2018, Apple made history as the first US firm to reach one trillion dollars in market capitalization, but Amazon’s and Microsoft’s also crossed the one trillion-mark by the end of the first quarter of 2019. By the close of September 2020, Apple’s shares were trading at about $115.
Another example is Coca Cola. The company has over 4.3 billion shares, which were trading at $41.9 by early October, meaning that its total market capitalization is about $180.1 billion.
The minimum market capitalization can move up or down, but the current number is $8.1 billion. Of course, this figure was way lower about 10 years ago, and you can expect it to continue increasing in the future.
Profitability
When investors look for stocks, they put a lot of emphasis on profitability. This is why USA 500 and USA 30 indices give a lot of weight to the selected firm’s profitability.
To gauge the profitability of a company, there are two methods that are used; checking the profitability of the firm over the last one year (four quarters) and in the most recent quarter.
However, how profitability plays is very dynamic. In theory, if a company loses $200 million in the first three quarters of a year and then makes a profit of $700 million in the third quarter, it would still be considered profitable.
When considering profitability, companies that have just gone public are required to show their trading history for the past 12 months. This means that if you have just concluded an IPO, it is impossible to immediately hop into the USA 500 Index, even with a high market capitalization.
A Company’s Liquidity and Float should be Easy to Check
The goal of USA 500 is to correctly track the companies with large capitalization that you can invest in. In addition to large capitalization, firms that are only owned by a few individuals (closely held) or those with little trading volume (thinly traded) are disqualified. So, here is how this rule is applied.
To get your company into the S&P 500, your business is required to have more than 50% of its stocks being traded on the stock exchanges. This is a correct assertion because a company with 60% of the shares owned by the founder is more private than another firm where owners only hold 40%.
Besides a firm being publicly owned, it also needs to be liquid to join the S&P 500 index. To achieve this, the company is required to have a trading volume of more than 100% and to have traded no less than 250,000 shares in the previous six months. This implies that if a company has two billion shares, all of them must be traded every year.
Most of the top-rated companies in the US meet these requirements with ease, and it is the reason why they are always on the list or get their way back after falling off.
Companies that Get Free Pass into the USA 500
From the requirements that we have listed above, it is clear that they are pretty stringent, but there are some companies that get a free pass. These are the stocks that are part of other top-rated indices, such as the S&P MidCap 400 and S&P SmallCap 600. These stocks are exempted from the rules of float, profitability, and liquidity.
The argument for exempting these stocks is that if your company is already part of the exempted indices, it will have met most of the requirements for listing on S&P 500. Therefore, if you have a company and want to get your way into the S&P 500, one of the methods is joining the exempted indices.
Some Companies Cannot Get into the USA 500
Notably, S&P 500 only considers standard incorporations and REITs (real estate investment trusts), so other forms of companies falling outside the two categories are excluded. For example, companies with exotic structures, such as master limited partnerships (MLPs) and business development companies (BDCs) are excluded. Limited liability companies, exchange-traded funds (ETFs), and closed-end funds (CEFs) are also excluded.
S&P Goes beyond the Rules!
Notably, meeting the basic rules to join S&P 500 is not enough to join the index! The index committee must also give the nod for your company to join as a way of filtering firms that might want to take advantage of the index.
The active involvement of the index committee makes S&P 500 more active compared to others. For instance, Russel 100 only requires a company to meet the rules without subjecting it to an active committee.
When the USA 500 index committee strategically adds or removes stocks, it helps to ensure that the index does not differ significantly from what is happening on the market.
To get a company to get listed on the index, therefore, it must be performing well and maintain an upward trend on the market to impress the committee.
In this post, we have looked at the stringent rules that companies need to meet to get listed on the USA 500 Index. So, if you are a new trader, USA 500 companies can be a good consideration.
By Adedapo Adesanya
The Nigerian Export Promotion Council (NEPC) has announced a 24.75 per cent increase in the value of the country’s non-oil exports, reaching a total of $1.791 billion in the first quarter of 2025.
It stated that the amount surpassed the $1.436 billion generated in the first quarter of 2024.
The Executive Director of the council, Mrs Nonye Ayeni, disclosed the figures while addressing the journalists in Abuja on Monday.
She said the significant growth reflects the resilience and diversification of Nigeria’s export sector beyond crude oil, a shift aimed at reducing the country’s reliance on oil revenue.
According to her, the surge in non-oil exports was driven by increased economic activity in the Agriculture, Manufacturing, and Solid Minerals sectors.
On the US 14 per cent trade tariff, the council says it was positive for the country, adding that it was an opportunity to focus on value addition and increased competitiveness in the global market.
Recall that Nigeria has reiterated plans to boost its non-oil revenues with the Minister of Industry, Trade and Investment, Mrs Jumoke Oduwole, saying the country was stepping up its diversification efforts.
Earlier this month, the Trade Minister said the nation would tackle this challenge with pragmatism, aiming to boost non-oil exports and strengthen economic resilience under President Bola Tinubu’s Renewed Hope Agenda.
Mrs Oduwole had said the US remains a key partner, with bilateral trade reaching N31.1 trillion from 2015 to 2024.
The measures taken by the US presents destabilising challenges to price competitiveness and market access, especially in emerging and value-added sectors vital to our diversification agenda,” the minister explained.
“Government is implementing a range of interventions in policy, financing, infrastructure, and diplomacy to help Nigerian businesses remain competitive amidst regional and global tariff hikes,” Mrs Oduwole said as she outlined Nigeria’s response.
By Dipo Olowookere
A new report which listed the Top 10 Safest Countries for Foreign Investment has excluded Nigeria despite the efforts of the administration of President Bola Tinubu to make the country the preferred place to do business.
Since assuming office on May 29, 2023, Mr Tinubu has carried out some economic reforms aimed to attract investors to Nigeria, including the liberalisation of the foreign exchange (FX) market, removal of petrol subsidy, and streamlining the tax regime, among others.
In a recent study by Atmos, top 30 countries were identified based on economic stability, investment attractiveness, and political and economic stability.
In the outcome of the research made available to Business Post on Monday, it was stated that countries were evaluated using six metrics: economic stability rank, political stability score, global peace index, investment attractiveness, foreign direct investments (FDI), and GDP per capita. These metrics were ranked, with the top country receiving a score of 100.
“When evaluating investment potential, it’s clear that economic strength alone doesn’t paint the full picture.
“Political stability and a peaceful environment are equally essential in fostering a climate that attracts long-term investment. Investors are drawn to countries where risks are minimized and confidence in future growth is high, making these factors just as critical to a nation’s financial appeal,” the chief executive of Atmos, Mr Nick Cooke, stated.
Switzerland led the ranking as the lowest risk country to invest in, with a score of 100. It featured exceptional economic fundamentals and the highest GDP per capita among the top-ranked countries at nearly $100,000. Switzerland demonstrates balance across all metrics, ranking 2nd in economic stability while maintaining excellent political stability (1.07) and peace index scores (1.33).
Singapore followed in 2nd with a score of 90.21, standing out with the highest investment attractiveness (82.4) among the top three nations and exceptional foreign direct investment inflows of over $175 million, outperforming Switzerland in this metric. The city-state’s strategic position in Southeast Asia, combined with its second-place economic stability ranking, creates a powerful investment hub. Singapore’s global peace index of 1.3 is the best among all ranked countries, reflecting its excellent security environment.
The third of the list was Canada with a score of 89.53, demonstrating exceptional investment attractiveness (86.6) and solid political stability (0.82). Canada’s balanced approach to foreign investment has resulted in substantial foreign direct investment (FDI) inflows exceeding $47 million, positioning it as a reliable North American investment alternative. The country maintains strong economic fundamentals, offering a reasonable GDP per capita of $53,431.
Japan ranked 4th with a score of 88.77, featuring the highest investment attractiveness score (86.8) among all countries in the index. The Asian country has an excellent political stability (0.951) and a strong peace index rating (1.33), creating a secure environment for foreign capital. Despite having a lower GDP per capita than other top-five nations at $33,766, Japan’s economic resilience and technological innovation continue to attract nearly $20 million in foreign investments.
The 5th place was occupied by Germany with a score of 86.32. As Europe’s largest economy, Germany maintains excellent economic stability (ranked 3rd), following Switzerland and Singapore, and a strong investment attractiveness (84.6). With GDP per capita exceeding $54K and foreign direct investments approaching $20 million, Germany represents the centerpiece of European investment security.
Denmark is the 6th-lowest risk country to invest in, with a score of 84.38, featuring an impressive GDP per capita of $68,453 and excellent political stability (0.85). Denmark’s peace index of 1.3 places it among the safest nations globally, though its relatively modest FDI figures of $4.5 million reflect its smaller market size. The Nordic nations’ consistent economic policies and transparent business environment remain key strengths for investors seeking stability.
In the 7th, Australia scored 84.08, balancing strong political stability (0.921) with excellent investment attractiveness (81.9). Australia has attracted substantial foreign direct investments exceeding $32.5 million, second only to Singapore among the top ten countries. Australia has attracted $32.5 million in foreign investments, substantially higher than Denmark and second only to Singapore. It also offers a GDP per capita of $64,820 with a relatively stronger peace index (1.525) compared to several preceding countries.
Norway was in 8th with a score of 82.44. With the second-highest GDP per capita at $87,925, Norway only trails Switzerland in this metric. It maintains solid political stability (0.89) and investment attractiveness (78.8), though its economic stability rank (11th) is the lowest among the top ten countries. The Nordic nation has attracted over $10.7 million in foreign investments despite its relatively small market size.
The United Arab Emirates took the 9th position with a score of 80.71, claiming the top position in economic stability among all countries in the index. The UAE combines this economic strength with moderate political stability (0.681) and substantial foreign investments exceeding $22.3 million. At the same time, its relatively weaker peace index score (1.979) and lower investment attractiveness (59.6) compared to other top nations prevent a higher overall ranking.
The 10th spot was grabbed by New Zealand with a score of 76.96, featuring excellent peace index ratings (1.31) but faces challenges with its economic stability ranking (18th) and modest foreign investment inflows of $3.59 million. The country’s investment attractiveness score of 63.0 is significantly lower than that of other top-ranked nations, reflecting its geographical isolation and smaller market size.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange decreased by 0.53 per cent on a week-on-week basis in Week 17 of the 2025 trading year.
This depleted the market capitalisation of the bourse by N10.14 billion in the four-day trading week to N1.914 trillion from the N1.924 trillion recorded in the previous week and the NASD Unlisted Securities Index (NSI) slid by 17.32 points to 3,269.06 points from the 3,286.38 points posted in Week 16.
There were only four trading days last week due to the Easter break stretching into the new week, though the market witnessed a higher turnover.
The volume of securities bought and sold by the market participants soared by 293,055.9 per cent to 3.9 billion units from the 1.33 million units recorded a week earlier, and the value of shares skyrocketed by 33,661.6 per cent to N9.9 billion from the N29.35 million achieved in the preceding week.
The most traded security by value for the week was Infrastructure Credit Guarantee (InfraCredit) Plc with N9.5 billion, Geo-Fluids Plc recorded N355.4 million, FrieslandCampina Wamco Nigeria Plc traded N7.2 million, Central Securities Clearing System (CSCS) Plc transacted N3.8 million, and Afriland Properties Plc posted N2.5 million.
Also, InfraCredit Plc was the most traded instrument by volume with 3.7 billion units, Geo-Fluids Plc transacted 207.7 million units, UBN Property Plc recorded 1.04 million units, FrieslandCampina Wamco Nigeria Plc traded 0.201 million units, and CSCS Plc exchanged 0.178 million units.
Five securities ended on the losers’ table, with FrieslandCampina Wamco Nigeria Plc leading after shedding 6.0 per cent to end at N35.37 per share compared with the previous week’s N37.64 per share.
Further, 11 Plc fell by 3.8 per cent to close at N236.25 per unit versus N245.50 per unit, UBN Property Plc lost 3.2 per cent to trade at N2.10 per share versus N2.17 per share, CSCS Plc declined by 1.8 per cent to N21.71 per unit from N22.10 per unit, and Afriland Properties Plc slumped by 0.1 per cent to N17.78 per share from N17.80 per share.
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