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The Nigerian Stock Exchange (NSE) is putting final touches to the biannual review for the NSE 30, NSE 50 and the five Sectoral Indices of The Exchange - the NSE Banking, the NSE Consumer Goods, the NSE Oil & Gas, NSE Industrial and the NSE Insurance. The composition of these indices after the review will be effective on July 1, 2013. The review will witness the entry of some major companies and exit of others.
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Index Title |
Likely Incoming |
Likely Exiting |
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NSE-30 Index |
· Oando Plc · The Okomu Oil Palm Plc · Sterling Bank Plc · Chemical & Allied Products Plc · Presco Plc
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· Total Nigeria Plc · Dangote Flour Mills Plc · Mobil Oil Nigeria Plc · Ashaka Cement Plc · Glaxo Smithkline Consumer Nig. Plc |
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NSE-50 Index |
· Livestock Feeds Plc · AIICO insurance Plc · WAPIC Insurance Plc · Eterna Plc · Northern Nigeria Flour Mills Plc
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· Custodian & Allied Insurance Plc · Nigerian Aviation Handling Co. Plc · Continental Reinsurance Plc · Cement Company of Northern Nig. Plc |
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NSE Consumer Goods Index
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· UTC Nigeria Plc · Multi-Trex Integrated Foods Plc · Nigeria Enamelware Plc
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· Vitafoam Nigeria Plc · Northern Nigeria Flour Mills Plc · Honeywell Flour Mills Plc |
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NSE Banking Index
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· Sterling Bank Plc · Unity Bank Plc · Wema Bank Plc
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· Skye Bank Plc · Fidelity Bank Plc · Diamond bank Plc |
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NSE Insurance Index |
· Law Union & Rock Insurance Plc · Mutual Alliance Insurance Plc · Consolidated hallmark Insurance Plc · Regency Alliance Insurance Plc · Unity Kapital Assurance Plc
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· Goldlink Insurance Plc · Linkage Assurance Plc · Prestige Assurance Plc · Lasaco Assurance Plc · Sovereign Trust Insurance Plc |
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NSE Oil/Gas Index |
· Eterna Plc · Beco Petroleum Plc
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· Japaul Oil & Maritime Services |
As the Index Committee explained, The NSE-30, NSE-50 and NSE Industrial Indices are modified market capitalization index with the numbers of included stocks fixed at 30, 50 and 10, respectively. The numbers of included stocks in the NSE-Consumer Goods, Banking, Insurance and Oil/Gas Indices are 15, 10, 15 and 7 respectively.
The Stocks will be picked 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 be traded for at least 70 percent of the number of times the market opened for business.
The Committee further stated that the exchange was not oblivious of the fact that the number of the stocks that will be included in some of the indices may be inappropriate for optimal portfolio diversification; however, the numbers would be reviewed as sector conditions change.
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 sectoral indices and one index in 2013, 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.
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.
The compiler of the indices maintains the right to modify the circulated selection above in connection with any mergers, takeovers, suspension or resumption of trading or any other company structure changes during the period before the effective date of the annual review.
