MSCI Deletes Forte Oil, Guinness, FCMB Others from Frontier Markets Indexes

By Dipo Olowookere

One of the world’s leading providers of research-based indexes and analytics, MSCI, has announced the deletion of some Nigerian firms listed on the Nigerian Stock Exchange (NSE) from its frontier market indexes.

MSCI said it has deleted FBN Holdings Plc, Forte Oil, Guinness Nigeria Plc and PZ Cussons Nigeria Plc from the main MSCI Frontier Markets Indexes and added to the MSCI Frontier Markets Small Cap Indexes.

Also, the research firm removed Cadbury Nigeria Plc, Diamond Bank Plc, First City Monument Bank (FCMB), GlaxoSmithKline Nigeria Plc, Skye Bank Plc and Sterling Bank Plc from the MSCI Frontier Markets Small Cap Indexes.

The reviews were made at the just-concluded November 2017 Semi-Annual Index Review and these changes are expected to be implemented at close of November 30, 2017.

The deletion might come as a surprise as MSCI last month announced its decision to retain the MSCI Nigeria Indexes in the MSCI Frontier Markets Indexes.

The latest development now leaves Nigeria with only 12 stocks on the Frontier Index.

These equities are Nigerian Breweries; Guaranty Trust; Zenith Bank; Nestle Nigeria, Dangote Cement, United Bank for Africa, Access Bank, Stanbic IBTC; Seplat Petroleum Development Company; Ecobank Transnational Incorporated; Lafarge Africa and Unilever Nigeria.

During the review, there were five additions to and nine deletions from MSCI Frontier Markets Index and for Nigeria, there were no additions, but four removals from the group.

For the MSCI Frontier Markets Small Cap Index, there were 19 additions and 17 deletions with Nigeria having FBN Holdings, Guinness Nigeria and PZ Cussons moved down to the index whilst Cadbury Nigeria, Diamond Bank, FCMB, GlaxoSmithKline, Skye Bank, and Sterling Bank deleted from the index.

As a result of this, analysts have predicted sell pressure on six shares deleted from the MSCI Frontier Markets Small Cap Indexes in the coming weeks, while the shares that remain in the main MSCI Frontier Markets Indexes might see some buy interest as investors rebalance their holdings.