NSE Reviews Composition Of Market Indices | Independent Newspapers Limited
Newsletter subscribe


NSE Reviews Composition Of Market Indices

Posted: Jan 1, 2016 at 10:54 am   /   by   /   comments (0)

The Nigerian Stock Exchange (NSE) has announced the review of the NSE indices, which include the NSE 30 Index, the NSE Lotus Islamic Index, the NSE Banking Index and the NSE Consumer Goods Index.

Others are the NSE Oil & Gas index, the NSE Pension Index, the NSE Industrial Goods Index and the NSE Insurance Index. According to a statement from the management, the composition of the indices will be effective from today (January 1, 2016) after the completion of the year-end review and index rebalancing exercise, which will see the entry of some major companies and the exit of others from the various 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 four sectorial 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 15 most capitalised and liquid companies in the Insurance and Consumer Goods sectors, top 10 most capitalised and liquid companies in the Banking and Industrial Goods sectors and the top seven most capitalised and liquid companies in the Oil & Gas sector.

In July 2012, the Nigerian bourse launched the NSE Lotus Islamic index (NSE LII), which consists of companies whose business practices are in conformity with Shari’ah investment principles, with the aim of increasing the breadth of the market and creating an important benchmark for investments as the alternative non-interest investment space widened.

The companies that appear on the Islamic Index were screened by Lotus Capital Halal Investment in accordance with a methodology approved by an internationally recognised Shari’ah Advisory Board comprising of renowned Islamic scholars.

Also, the NSE launched the Pension Index on July 1, 2015 to serve as performance benchmark for Pension Asset Managers, Non-Pension Asset managers and investors. Similarly, the Nigerian bourse launched the Premium Board Index, an equity index designed to provide a benchmark to capture the performance of companies listed on the Premium Board in August 2015.

The index provides a basis for developing products (such as ETFs and equity index derivatives) that are tradable on the bourse.

As at December 29, 2015, the NSE Premium Board Index has a four-year average return of 11.04 per cent versus the All Share Index return of 7.3 per cent over the same period. The Premium Board is for issuers with a minimum market capitalisation of N200 billion who voluntarily adhere to meet an independently verified standard of stringent corporate governance standards.