The Nigerian Stock Exchange, NSE, has commenced review of the NSE 30, and the six sectoral indices, with Wema Bank and Diamond Bank hinted as firms likely to exit the banking index.
The other six sectoral indices are NSE Consumer Goods, NSE Banking, NSE Insurance, NSE Industrial, NSE Oil & Gas and the NSE Lotus Islamic Indices.
These indices are reviewed bi-annually (June and December) except for NSE Pension index that is reviewed once in the year (December).
With the review, the entry/re-entry as well as exit of some major companies is expected of July 1st, 2017, the effective date for the changes to be made.
The companies expected as likely entrants for the Banking Index are Skye Bank and Unity Bank.
For the NSE 30, likely incoming companies are Fidelity, Sterling, Diamond, Cadbury, and FCMB while Likely Exiting companies are Conoil, UACN, Julius Berger, 7up Bottling and Okomu Oil
For the Industrial Index, Grief Nigeria Plc, First Aluminium, African Paints are likely to join the index while Portland Paints, Paints and coatings Plc and DN Meyer are likely to exit.
The NSE-30 and NSE Industrial Indices are modified market capitalization index with the numbers of included stocks fixed at 30 and 10, respectively.
The stocks are selected 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 have traded for at least 70 percent of the number of times the market opened for business.
The Oil and Gas Index may see Japaul and Eterna Oil as new entrants while MRS Oil and Conoil are likely to exit.
The lotus Islamic Index is likely to see the entrance of Total and NAHCO while Forte Oil and 7up will exit.
