The Nigerian Exchange Limited (NGX) has conducted a review of its indexes, resulting in the inclusion of prominent banking stocks such as FBN Holdings, Guaranty Trust Holding Company Plc (GTCO), FCMB Group, and Stanbic IBTC Holdings Plc in the Banking Index. The NGX announced the changes in a corporate notice on Tuesday, indicating adjustments to various indices.
As part of the rebalancing process, Jaiz Bank, Unity Bank, Wema Bank, and the delisted Union Bank of Nigeria are exiting the Banking Index. Stanbic IBTC and FCMB Group were already identified as other financial institutions joining the index.
Index rebalancing is a critical process that involves adjusting the composition of a market index to ensure its reliability and relevance. These adjustments can lead to significant shifts in trading volumes, impacting stock prices, sector trends, and overall market sentiment.
The NGX conducts semi-annual rebalancing of its indices on the first business day in January and July, respectively. The changes took effect at the opening of the market on January 2, 2024.
In addition to the Banking Index, other indices affected by the review include 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 five Sectoral Indices of The Exchange – NGX Insurance, NGX Industrial, NGX Consumer Goods, and NGX Oil & Gas.
The NGX’s move to include and exclude companies in various indices is aimed at ensuring the effectiveness and accuracy of these market benchmarks.
Insurance, Pension, and Other Indices Experience Changes
The Insurance Index welcomes Universal Insurance Plc, while International Energy Insurance Plc exits. The Pension Index sees the addition of Transcorp Hotels Plc, Fidson Healthcare Plc, Nigerian Aviation Handling Company Plc, and Conoil, with PZ Cussons Nigeria Plc, Nascon Allied Industries Plc, and Unilever Nigeria Plc exiting.
For the NGX Lotus Islamic Index, Nestle Nigeria Plc exits. Geregu Power Plc joins the Pension Broad Index, while Glaxo Smithkline Consumer Nigeria Plc departs. The Afrinvest Dividend Yield Index includes MTN Nigeria, Vitafoam, Stanbic IBTC Holdings, and NPF Microfinance Bank Plc, while Dangote Sugar Refinery, FCMB Group, GSK, and Cutix exit the index.
Despite these changes, the NGX ended the year 2023 with an impressive gain for investors in the equity market, reaching over N13 trillion. This significant increase nearly tripled the figure recorded in 2022, reflecting positive market sentiment and investor confidence.
As the market capitalization closed at N40.917 trillion and the All-Share Index appreciated by 45.90%, investors experienced notable gains throughout the year. The NGX’s robust performance in 2023 marked a substantial improvement compared to the previous year, showcasing the resilience and attractiveness of the Nigerian equities market.
