The Nigerian Stock Exchange has finally delisted Conoil PLC and Forte Oil PLC from the NSE 30 Index.
The exchange had issued a warning last week that it will be reviewing its indices including the NSE Consumer Goods, NSE Banking, NSE Insurance, NSE Industrial, NSE Oil & Gas and the NSE Lotus Islamic Indices.
Forte Oil and Conoil are both indigenous downstream oil companies engaged in the distribution, retailing of fuel and production of lubricants.
However, the NSE said it is aware that the number of the stocks included in some of the indices may not be practically suitable for optimal portfolio diversification; however, the numbers would be reviewed as sector conditions change.
The NSE-30 and NSE Industrial Indices are modified market capitalization index with the numbers of included stocks fixed at 30 and 10, respectively. The Stocks are selected based on their market capitalization from the most liquid sectors. The liquidity is based on the number of times the stock is traded during the preceding two quarters. To be included, the stock must have traded for at least 70 percent of the number of times the market opened for business.
The indices, which were developed using the market capitalization methodology, are rebalanced on a biannual basis -on the first business day in January and in July.