2020: NSE reviews stock market indices

As activities started at the Nigeria’s stock market for year 2020, the management of the Exchange has announced the results of its annual full year market index review which reflects exit and entrance of listed companies into various indices.

The indices include 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, namely NSE Banking, NSE Insurance, NSE Industrial, NSE Consumer Goods and NSE Oil & Gas.

The latest review has led to the entry and exit of major companies from several indices which took effect as the market opened on Thursday, January 2, 2020.

According to NSE, the indices were developed to allow investors to follow market movements and properly manage investment portfolios.

Designed using the market capitalization methodology, the indices are rebalanced on a semiannual basis on the first business day in January and in July.

According to the latest review, CCNN Plc, First City Monument Bank Plc and MTN Nigeria entered the NSE 30 index while Forte oil Plc, Oando plc and PZ Industries exited the index.

The NSE insurance index witnessed the incoming of Cornerstone Insurance Plc and Sunu Assurance Nigeria Plc as Veritas Kapital Assurance Plc and Continental Insurance bowed out.

While Premier Paints Plc joined NSE Industrial Index, Notore Chemicals Plc left. MTN Nigeria came onboard Corporate governance index even as no stock exited. Afrinvest Div Yield index welcomed Conoil Plc, Dangote Cement and Vitafoam while the index dropped NASCON, NEM Insurance and UACN Plc.

Similarly, while Access Bank Plc, Dangote Sugar and Flour Mills Plc exited Meristem Growth Index, Cadbury Nigeria Plc, CAP Plc, Dangote Cement Plc, Ecobank Transnational Incorporated, May &Baker, UAC-Properties, Wapic Insurance Plc and Zenith Bank Plc joined.

In addition, major changes occurred on Meristem Value Index with the incoming of CCNN Plc, Cpnoil Plc, Custodian insurance Plc, Glaxo Smithkline Plc and NAHCO Plc NASCON, as Dangote Cement Plc, GT bank Plc and Wapic Insurance Plc exited.

Meanwhile, Afrinvest bank value index NSE Oil and Gas, NSE banking Index and NSE consumer goods index did not record any adjustment in the latest reshuffling of the indices.

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 such as Lotus Capital, Meristem Securities and Afrinvest, has also published co-branded indices.