Skye Bank and Wema Bank Plc have been eased out of the Nigerian Stock Exchange,
NSE’s market indices following the biannual rebalancing undertaken by the Index
Committee.
On
biannual basis, the NSE reviews itsNSE 30, NSE Lotus Islamic Index (NSE LII)
and the five Sectoral Indices, which include: the NSE Banking, the NSE Consumer
Goods, the NSE Oil & Gas, the NSE Industrial and the NSE Insurance.
The
composition of the indices is expected to take effect today (Tuesday July 1,
2014)
On
the NSE 30 Index, Ashaka Cement Plc was brought in, while Skye Bank was eased
out. On the NSE Lotus Islamic Index (NSE LII), UACN was also brought in and
NAHCo exited.
The
review saw Champion Breweries joining the NSE Consumer Goods, while DN Tyre
& Rubber Plc was removed; Sterling Bank joined the NSE banking Index, while
Wema Bank was removed.
On
the NSE Insurance Index, two firms – Staco Insurance and Unity Kapital
Assurance – were brought in, while Consolidated Hallmark Insurance and Prestige
Assurance were eased out.
Meanwhile,
the NSE Oil & Gas and the NSE Industrial indices remained unchanged.
In a
statement communicating the changes, the Index Committee explained that the
NSE-30 and NSE Industrial Indices are modified market capitalisation indices
with the numbers of included stocks fixed at 30 and 10 respectively, while the
numbers of included stocks in the NSE-Consumer Goods, Banking, Insurance and
Oil/Gas Indices are 15, 10, 15 and seven in that order.
The
stocks are 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 percent of the number of times the market opened for business.
The
NSE 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 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 capitalised and liquid companies
in the insurance and consumer goods sectors, top ten most capitalised and
liquid companies in the banking and industrial goods sector and the top seven
most capitalised and liquid companies in the oil & gas sector.
On
July 2012, the Exchange launched The NSE LII which consists of companies whose
business practices are in conformity with the principles of Shari’ah 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
Committee stated that all 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 recognised Shari’ah Advisory Board
comprising of renowned Islamic scholars.
The
price indices, which were developed using the market capitalisation
methodology, are rebalanced on a biannual basis -on the first business day in
January and in July.
Vanguard
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