The Nigerian Stock Exchange (NSE) last week reviewed The NSE 30, NSE 50 and the five sectoral indices with new entrants. The five sectorial indicators are: NSE Banking, NSE Consumer Goods, the NSE Oil & Gas, NSE Industrial and NSE Insurance. The composition of these indices after the review will be effective today.
While the NSE began publishing the NSE 30 Index in February 2009 with index values available from January 1, 2007, it had developed four sectorial indices with a base value of 1,000 points, July 2008 designed to provide investible benchmarks to capture the performance of specific sectors.
In its review of the indices, Oando Plc joined the NSE-30, while Mobil Oil Nigeria Plc exited. In the NSE-50 Index, Livestock Feeds Plc was brought in while Nigerian Bag Manufacturing Company Plc was removed. In the NSE Consumer Index, there was no change, while Mutual Alliance Insurance Plc and Law Union & Rock Insurance Plc joined the Insurance Index. On the other hand, Linkage Assurance Plc and Goldlink Insurance Plc were removed.
With respect to the Banking Index, Sterling Bank Plc entered while FCMB Group Plc exited, just as Eterna Plc joined the NSE Oil/Gas Index, while Japaul Oil & Maritime Services Plc exited.
The NSE Lotus Sharia complaint Index had three changes. Julius Berger Nigeria Plc, Chemical & Allied Product Plc and Presco Plc were added to the index, while Japaul Oil & Chemical Service Plc, Dangote Flour Mills Plc and Honeywell Mills Plc were removed.
The sectoral indices comprise the top 10 most capitalised and liquid companies in the each of the sectors.
According to the index committee, the NSE-30, NSE-50 and NSE Industrial Indices are modified market capitalisation 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 seven respectively.
The committee explained that the stocks were selected based on their market capitalisation 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 per cent of the number of times the market opened for business,” the committee said.