Stocks fall further, NSE reviews market indices’ composition

Stocks fall further, NSE reviews market indices’ composition

Stocks fall further, NSE reviews market indices’ composition

The market capitalisation of equities listed on the Nigerian Stock Exchange continued its downward trend last week, falling by 2.74 per cent at the end of trading.

The NSE All-Share Index declined to 37,862.53 basis points from 38,928.02 at the close of trading the previous week while the market capitalisation dipped to N13.716tn from N14.101tn week-on-week.

Similarly, all other indices finished lower with the exception of the NSE Insurance Index that appreciated by 3.55 per cent, while the NSE ASeM Index closed flat.

A total turnover of 1.097 billion shares worth N15.471bn in 16,288 deals were traded last week by investors on the floor of the Exchange in contrast to a total of 1.738 billion shares valued at N18.462bn that exchanged hands in 14,790 deals the previous week.

The financial services industry (measured by volume) led the activity chart with 816.547 million shares valued at N9.425bn traded in 9,263 deals, thus contributing 74.44 per cent and 60.92 per cent to the total equity turnover volume and value respectively.

The consumer goods industry followed with 76.361 million shares worth N2.992bn in 2,545 deals, while the third place was occupied by the oil and gas industry with a turnover of 51.600 million shares worth N594.590m in 1,744 deals.

Trading in the top three equities namely – United Bank for Africa Plc, Zenith International Bank Plc and FBN Holdings Plc (measured by volume) – accounted for 325.580 million shares worth N4.854bn in 3,381 deals, contributing 29.68 per cent and 31.37 per cent to the total equity turnover volume and value respectively.

Meanwhile, the NSE has announced a review of the NSE 30, and the six sectoral indices of the Exchange, namely NSE Consumer Goods, NSE Banking, NSE Insurance, NSE Industrial, NSE Oil & Gas and NSE Lotus Islamic Indices.

It said the composition of the indices after the review would be effective on July 1, 2018, adding, “With the review, we will witness the entry/re-entry as well as exit of some major companies.”

The bourse began publishing the NSE 30 Index in February 2009 with index values available from January 1, 2007.

According to a statement, on July 1, 2008, the NSE developed four sectoral indices with a base value of 1,000 points, designed to provide investable benchmarks to capture the performance of specific sectors.

It said, “The sectoral indices comprise the top 15 most capitalised and liquid companies in the insurance and consumer goods sectors, top 10 most capitalised and liquid companies in the banking and industrial goods sector and the top seven most capitalised and liquid companies in the oil and gas sector.

“In July 2012, the Nigerian bourse launched the NSE Lotus Islamic index, which consists of companies whose business practices are in conformity with Shari’ah investment principles, with the aim of increasing the breadth of the market and creating an important benchmark for investments as the alternative ethical and non-interest investment space widened.”

The NSE said the companies on the Islamic Index had been thoroughly screened by Lotus Capital Halal Investment, in accordance with a methodology approved by an internationally recognised Shari’ah Advisory Board, comprising of renowned Islamic scholars.

The price indices, which were developed using the market capitalisation methodology, are reviewed and rebalanced on a bi-annual basis – on the first business day in January and in July, according to the statement.