Seplat Petroleum Development Company Plc has been included in the Nigerian Stock Exchange (NSE) 30 Index, just as Unity Bank Plc joined the NSE Banking Index. The NSE 30 Index comprises the top 30 stocks on the Nigerian bourse, while the NSE Banking Index is composed of the top 10 banking equities in the market. Both indices including other sectoral ones are reviewed regularly by the Index Committee of the NSE. The committee has just carried out the 2014 year-end review of the NSE 30, NSE 50 and the five sectoral indices.
At the end of the review, Seplat, Mobil Oil Nigeria Plc and Seven-Up Bottling Company Plc were included in the NSE 30 Index. Conversely, Glaxosmithkline Consumer Plc, Fidelity Bank Plc and Ashaka Cement Plc were removed.
Unity Bank Plc and Wema Bank Plc joined the Banking Index, while Skye Bank Plc and Fidelity Bank exited the index. The NSE Insurance Index , Unity Kapital Assurance Plc exited while Linkage Assurance Plc was included.
Avon Crowncaps & Containers Nigeria Plc was included in the NSE Industrial Index, while Paints & Coatings Manufacturers Plc was removed. Seplat displaced Eterna Plc to be included in the NSE Oil and Gas Index. According to the committee,
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, respectively. The stocks were picked 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.
The Nigerian bourse 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 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.
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.