Nigerian Exchange Group Rebalances Key Market Indices to Enhance Investor Experience
The Nigerian Exchange Limited (NGX) has announced the results of its comprehensive full-year review of major market indices. This strategic rebalancing, which took effect at the commencement of trading on Friday, January 2, 2025, is designed to significantly improve market tracking, boost liquidity, and facilitate more effective portfolio management for investors operating within Nigeria’s capital market.
The review encompasses a wide array of influential indices, including the NGX 30, NGX Lotus Islamic, NGX Pension, NGX Pension Broad Index, Corporate Governance Index, Afrinvest Bank Value Index, Afrinvest Dividend Yield Index, Meristem Growth Index, Meristem Value Index, and the Exchange’s five key sectoral indices: Banking, Insurance, Industrial, Consumer Goods, and Oil & Gas.
Key Changes Across Major Indices
The rebalancing exercise has resulted in several notable additions and removals from various benchmark indices, reflecting shifts in market capitalization, performance, and strategic importance.
NGX 30 Index:
- Addition: Guinness Nigeria Plc
- Removal: United Capital Plc
NGX Insurance Index:
- Addition: Mutual Benefits Assurance Plc
- Replacement: Guinea Insurance Plc
NGX Oil & Gas Index:
- Addition: Japaul Gold & Ventures Plc
- Removal: MRS Oil Nigeria Plc
NGX Pension Index:
- Addition: Wema Bank Plc
- Removal: International Breweries Plc
NGX Lotus Islamic Index:
- Addition: Presco Plc
NGX Pension Broad Index:
- Addition: Nigeria Infrastructure Debt Fund
- Removals: Regency Alliance Insurance Plc and Veritas Kapital Assurance Plc
Partner Index Adjustments
Significant adjustments have also been made to indices managed in collaboration with partner organizations, further refining investment benchmarks and opportunities.
Afrinvest Bank Value Index:
- Additions: Wema Bank Plc and Jaiz Bank Plc
- Removals: Access Holdings Plc and Stanbic IBTC Holdings Plc
Afrinvest Dividend Yield Index:
- Additions: Dangote Cement Plc, Okomu Oil Palm Company Plc, and Vitafoam Nigeria Plc
- Removals: Conoil Plc, May & Baker Nigeria Plc, Red Star Express Plc, SFS Real Estate Investment Trust, and Tripple Gee & Company Plc
Meristem Growth Index:
- Additions: BUA Cement Plc, Lafarge Africa Plc, AXA Mansard Insurance Plc, and AIICO Insurance Plc
- Removals: CAP Plc, Conoil Plc, and United Capital Plc
Meristem Value Index:
- Additions: Ecobank Transnational Incorporated, Julius Berger Nigeria Plc, and NEM Insurance Plc
- Removals: Dangote Sugar Refinery Plc, TotalEnergies Marketing Nigeria Plc, and Lafarge Africa Plc
NGX’s Commitment to Market Development
The Nigerian Exchange Limited emphasizes that its indices are constructed using a market capitalization methodology. These indices undergo a semi-annual rebalancing process, with adjustments becoming effective on the first business day of January and July each year. This systematic approach ensures that the indices remain representative of the market’s current state and provide reliable benchmarks for investors.
Jude Chiemeka, the Chief Executive Officer of NGX, commented on the significance of this exercise, stating, “The Nigerian Exchange will continue to champion market development through persistent innovation and the enhancement of our product offerings. Our goal is to deepen liquidity and forge stronger connections between Nigeria’s capital market and the global investment community.”
Abimbola Babalola, Head of Trading and Products at NGX, further elaborated on the utility of these indices. “Our indices are meticulously developed and managed to empower investors with the tools they need to efficiently track market performance and adeptly manage their investment portfolios,” Babalola explained.
The NGX also reserves the prerogative to implement additional adjustments to the indices prior to the effective date of any review. Such changes may be necessitated by corporate actions like mergers, takeovers, trading suspensions or resumptions, or other significant corporate developments that could impact the composition and representation of the indices. This flexibility ensures the ongoing relevance and accuracy of the benchmarks in a dynamic market environment.
