Dangote Flour Mills exit NSE’s top 30, as Custodian Investment joins
Adesola Afolabi was a businessamlive reporter and Head of Financial desk.
Dangote Flour Mills (DFM) has exited the NSE’s 30 index. Consequently, Custodian Investment Plc. is to replace Dangote Flour Mills on the index.
The Nigerian Stock Exchange (NSE), made this announcement following its biannual review of personal and co-branded indices.
This means that, for the next six months, Custodian Investment will contribute to the performance of the NSE 30 index. An index, which comprises of the 30 most capitalised stock on the Exchange.
Review of other indices
The NSE reviewed other indices. They include, the consumer goods index which also booted out Dangote Flour Mills and welcomed Mcnichols Plc.
Veritas Kapital Assurance replaced Sunu Assurance on the insurance index. Similarly, Notore Chemical industrial replaced First Aluminium on the industrial index. However, the NSE noted no changes to its banking, oil and gas as well as pension (which is reviewed once in the year –December) indices.
Requirement
A high frequency of trading activity on the stock of a company is required for a positive review, sources say. Although, the Nigerian bourse said its first four sectoral indices was developed with a base value of 1,000 points, on July 1, 2008. It was designed to provide investable benchmarks to capture the performance of specific sectors. The NSE also began publishing the NSE 30 Index in February 2009 with index values available from January 1, 2007.
How each index are composed
Explaining the composition of each index, the NSE said, Insurance and Consumer Goods Indices are composed of the top fifteen most capitalized and liquid companies in their specific sector. Likewise, the Banking and Industrial Goods Indices comprise of the top ten most capitalized and liquid companies in their respective sectors. In the same vein, the Oil & Gas Index is made up of the top seven most capitalized and liquid companies in the sector.
The NSE does a review of the NSE Lotus Islamic Index (NSE LII), twice a year. The NSE LII consist of companies whose business practices are in conformity with Shari’ah Investment Principles. Nigerian Aviation Handling Company replaced Total Nigeria on the index, following its review.
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The NSE created the LII to increase the breadth of the market and create an important benchmark for investments as the alternative ethical and noninterest investment space widened.