These Are The Changes Coming To The NSE’s Stock Indices

The Nigerian Stock Exchange, The Exchange, will be making fundamental changes to its indices from 1st of July 2016.

Stock indices are measurements of the value of a section of the stock market. The Exchange has the following indices NSE 30, and the six sectoral indices of the Exchange, which are NSE Consumer Goods, NSE Banking, NSE Insurance, NSE Industrial, NSE Oil & Gas and the NSE Lotus Islamic Indices.

These changes will lead to the entry/re-entry as well as exit of some major companies. The list of the actual incoming and outgoing companies will be announced on June 24, 2016

Below are the likely incoming and likely exiting companies in the various indices.

Indices Title	Likely Incoming	Likely Exiting
NSE 30 index	UACN Plc Presco Plc Cadbury Nig. Plc FCMB Group Plc Transcorp Hotels Plc	Glaxo Smithkline Consumer Plc Sterling Bank Plc Fidelity Bank Plc Diamond Bank Plc Transcorp Plc
NSE Consumer Goods Index	Northern Nigeria Flour Mills Plc DN Tyre & Rubber Plc Union Dicon Plc, Premier Breweries Plc	Vitafoam Nigeria Plc Tiger Branded Consumer Goods Plc Honeywell Flour Mills Plc, NASCON Allied Industries Plc
NSE Banking Index	Skye Bank Plc Unity Bank Plc	Wema Bank Plc Fidelity Bank Plc
NSE Insurance Index	Consolidated Hallmark Insurance Plc Law Union & Rock Insurance Plc International Energy Insurance Plc UNIC Insurance Plc Sovereign Trust Insurance Plc	Linkage Assurance Plc Cornerstone Insurance Plc Standard Alliance insurance Plc Universal insurance Co. Plc Equity Assurance Plc
NSE Industrial Index	Greif Nigeria Plc DN Meyer Plc	Avon Crowncaps & Containers Plc Paints & Coatings Manufacturers Plc
NSE Oil & Gas Index	Japaul Oil & Maritime Services Plc Eterna Plc	MRS Oil Nigeria Plc Conoil Plc
NSE Lotus Islamic Index	Total Nigeria Plc Forte Oil Plc	Lafarge Africa Plc Chemical & Allied Products Plc

As a background, The Exchange started publishing the NSE 30 Index in February 2009 with index values available from January 1, 2007. On July 1, 2008, the NSE developed four 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, 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.

In July 2012, The Exchange 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 ethical and noninterest investment space widened. The companies that appear on the Islamic Index have been thoroughly screened by Lotus Capital Halal Investment, in accordance with a methodology approved by an internationally recognized Shari’ah Advisory Board comprising of renowned Islamic scholars.

The price indices, which were developed using the market capitalization methodology, are reviewed and rebalanced on a bi-annual basis – on the first business day in January and in July.

 

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