Meristem, NSE Launch Indices to Track Stocks’ Growth, Value

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By Dipo Olowookere

The two new indices put together by the Nigerian Stock Exchange (NSE) and the Meristem Securities Limited focusing on investment STYLE orientations have gone live on the NSE website today, Tuesday, March 12, 2019.

The two new style indices are the NSE-Meristem Growth Index and NSE-Meristem Value Index and were designed in response to demand for customized indices to support product development and investment management.

Broadly, the style indices will provide a benchmark for the market to gauge the performance of value stocks and growth stocks listed on the Exchange.

Mr Jude Chiemeka, Divisional Head, Trading Business Division of the NSE remarked, “We are pleased to collaborate with Meristem Securities in the development of the first style-focused indices to be publicly launched in Nigeria.

“The introduction of the NSE-Meristem Growth and NSE-Meristem Value Indices is a laudable and innovative effort which is long overdue.

“These indices provide products strategists and asset managers the leverage to create investment vehicles that democratize professional asset management for the benefit of investors, while still following the tenets of classic investment philosophies: growth and value.

“The indices are available for licensing and the investing public is encouraged to take advantage of the benefits they provide”.

Shedding more light on the purpose of these indices, Mrs Kemi Akinde, Group Head Investment Research, Meristem Securities Limited, explained that “the indices are benchmarks to track the performance of growth and value stocks that are traded on the floor of the NSE, thereby contributing to the deepening of the equity capital market by providing a leverage for fund managers to build investment products.

“Furthermore, the indices serve as more appropriate benchmarks for fund managers with same investment philosophies help in effective performance attribution, and facilitate better manager selection and appraisal, while also providing market data for academics to enrich studies on the performance of growth and value stocks in the Nigerian market. A multi-factor approach was considered in developing the indices to enhance the index stability and minimize turnover cost.”

The NSE-Meristem Growth and Value indices, as with all other NSE indices, will align with the index committee’s Governance standards. Guidelines and methodologies for the indices are publicly available on the NSE and Meristem’s website. ​

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