By Dipo Olowookere
The Nigerian Stock Exchange (NSE) has announced the results of its annual full year market index review, leading to the entry and exit of major companies from several indices which will take effect when the market opens on Wednesday, January 2, 2020.
A statement issued by the local bourse and made available to Business Post on Tuesday said the review was for 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.
For the NSE 30 Index, CCNN, FCMB and MTN Nigeria were added, while Forte Oil, Oando, PZ Industries were removed. The NSE Insurance Index had Cornerstone Insurance and Sunu Assurances Nigeria Plc joining, with Veritas Kapital Assurance and Continental Insurance exiting.
Premier Paints was added to the NSE Industrial Index, while Notore Chemical was removed as MTN Nigeria was included to the NSE Pension Index and GlaxoSmithKline removed.
NSE Lotus Islamic Index has MTN Nigeria and Forte Oil joining the list with GlaxoSmithKline, CAP and Presco exiting. In addition, the Corporate Governance Index has MTN Nigeria as its new member, which no company was removed.
In the statement, it was stated that Meristem Growth Index now has Cadbury Nigeria, CAP, Dangote Cement, Ecobank, May & Baker, UAC-Properties, Wapic Insurance and Zenith Bank as new members, while the trio of Access Bank, Dangote Sugar and Flour Mills are leaving.
The Meristem Value Index has CCNN, Conoil, Custodian Insurance, Forte Oil, GlaxoSmithKline, NAHCO and NASCON joining, while Dangote Cement, GTBank and Wapic Insurance are quitting the index.
No company is joining or leaving the NSE Consumer Goods Index, NSE Banking Index, NSE Oil & Gas Index, Afrinvest Bank Value Index and Afrinvest Div Yield Index.
Business Post reports that the indices were developed to allow investors follow market movements and properly manage investment portfolios. Designed using the market capitalization methodology, the indices are rebalanced on a semi-annual basis on the first business day in January and in July.
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.
The exchange in collaboration with issuers like Lotus Capital, Meristem Securities and Afrinvest have also published co-branded indices.
Adedapo Adesanya