Nigerian Stock Exchange (NSE)
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The Nigerian Stock Exchange, NSE, on Wednesday, announced the review of the the bourse’s six sectoral indices.
The indices expected to be reviewed include NSE Consumer Goods, NSE Banking, NSE Insurance, NSE Industrial, NSE Oil & Gas and the NSE Lotus Islamic Indices.
A statement by Joseph Kadiri, NSE’s media officer, explained that the indices are normally reviewed bi-annually in June and December, except for NSE Pension index that is reviewed once in the year in December.
“With the review, we will witness the entry/re-entry as well as exit of some major companies,” the bourse said,
The composition of these indices after the review will be effective on July 1, it added.
According to the statement, the NSE-30 and NSE Industrial Indices are modified market capitalisation index with the numbers of included stocks fixed at 30 and 10, respectively, with the stocks 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, and the stock must have traded for at least 70 per cent of the number of times the market opened for business in order to be included,
“The Exchange 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,” it said.
Fidelity Bank Plc, Sterling Bank Plc, Diamond Bank Plc, Cadbury Nigeria Plc and the FCMB Group Plc are some of the likely companies to be included in the NSE 30 index.