Fidelity Bank joins NSE’s 30 most capitalised stocks

The Nigerian Stock Exchange (NSE) has announced Fidelity Bank as the new entrant into the NSE 30 Index; an index which holds NSE’s 30 most capitalised stocks.

The announcement was made following the latest reviews of the stock market indices, which saw seven stocks exiting their prior respective indices to give way for the entry of new six counterparts.

The review of the market includes the NSE-30, and the six sectoral indices of the Exchange, which are NSE Consumer Goods, NSE Banking, NSE Insurance, NSE Industrial, NSE Oil & Gas and the NSE Lotus Islamic Indices.

These indices are normally reviewed bi-annually in June and December except for NSE Pension index that is reviewed once in the year (December).

With the review, the market will always witness the entry/re-entry as well as exit of some major companies.

The result of the latest review had the NSE-30 index welcome Fidelity Bank Plc as Conoil Plc lost its membership of the index; while Total Nigeria Plc gained entry into the NSE Lotus Islamic Index and Forte Oil Plc exited.

The NSE Insurance Index welcomed Linkage Assurance Plc, Regency Alliance Insurance Plc and Universal Insurance Co. Plc as Sovereign Trust Insurance Plc, Unity Kapital Assurance Plc and Mutual Alliance Insurance Plc gave way by exiting the index.

The NSE Industrial index parted ways with exiting Paints & Coating Manufacturers Plc to welcome First Aluminium Niger Plc.

Meanwhile, the NSE Consumer Goods, NSE Banking Indices and NSE Oil and Gas indices remained unchanged, as no stock either exited or entered either of them.

The exchange explained that 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, while 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 Exchange explained, adding that the “Exchange is aware that the number of the stocks included in some of the indices may not be practically suitable for optimal portfolio diversification; however, the numbers would be reviewed as sector conditions change.”

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 developed the NSE Pension 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 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 sectors 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.