►The shares of 7up Bottling Company Plc, Seplat Petroleum Development Co. Plc and Mobil Oil Nigeria Plc have been included in the Nigerian Stock Exchange, NSE 30 Index.
►This followed the year-end review of the NSE 30 Index and the five sectoral indices – the NSE Banking, the NSE Consumer Goods, the NSE Oil & Gas, the NSE Industrial and the NSE Insurance Index.
►On the other hand, Glaxosmithkline Consumer Plc, Fidelity Bank Plc and Ashaka Cement Plc were exited.
►This followed the year-end review of the NSE 30 Index and the five sectoral indices – the NSE Banking, the NSE Consumer Goods, the NSE Oil & Gas, the NSE Industrial and the NSE Insurance Index.
►On the other hand, Glaxosmithkline Consumer Plc, Fidelity Bank Plc and Ashaka Cement Plc were exited.
While Unity Bank Plc and Wema Bank Plc were added to the NSE Banking Index, Skye Bank Plc and Fidelity Bank Plc were removed.
Linkage Assurance Plc was added to the Insurance Index, while Unity Kapital Assurance Plc was removed; on the NSE Industrial Index, Avon Crown Cap & Containers Nig. Plc was included while Paints & Coatings Manufacturers Plc was exited.
Again, Seplat Petroleum Dev Co. Plc joined the NSE Oil & Gas Index, while the review saw Eterna Plc exiting the sector. However, the NSE Consumer Goods Index remained unchanged.
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 seven, in that order.
The stocks to be included are 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 Index Review Committee explained that though 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 Exchange 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.
