NSE 30 index review affected Oando, 7Up, others

The Nigerian Stock Exchange (NSE) over the weekend review its NSE-30, and its seven sectoral indices, following the completion of the year-end review and index rebalancing exercise which will see the entry of some major companies and the exit of others from the various indices.
Most affected in the review were Oando Plc and 7-Up Bottling Company, which have been removed from all of the NSE’s blue-chip and sectoral indices namely: NSE Consumer Goods, NSE Banking, NSE Insurance, NSE Industrial, NSE Oil & Gas, NSE Pension and the NSE Lotus Islamic Indices, with effect from January 1, 2018.
The removal of the companies from NSE 30 index, Blueprint learnt was not in relation with the recent developments in both companies.
Oando Plc is scheduled for forensic audit ordered by the Securities & Exchange Commission (SEC) by a team to be led by Akintola Williams Deloitte; 7-UP Bottling Company is on the verge of being delisted from the NSE, following which the majority shareholder- Affelka B.V. has made a memorandum offer.
Both firms are being replaced in the index by Dangote Flour Mills Plc, which has recently turned positive, following the reacquisition of majority stake by Dangote Industries Limited core-investor from South Africa’s Tiger Brands Limited.
Others are: NASCON Allied Industries Plc and Diamond Bank; replacing Oando Plc, 7-UP Bottling Company, which is on the verge of being delisted from the NSE; as well as UACN Plc.
Seven-Up Bottling Company is also exiting the NSE Consumer Goods Index, giving way for Northern Nigerian Flour Mills; while there would be no changes to the NSE banking and Industrial Indexes.
Coming into the insurance index are Equity Assurance Plc and Mutual Benefits Assurance; replacing Regency Alliance Insurance and Universal Insurance Company.
Oando Plc is also exiting the NSE Oil/Gas and is being replaced by Eterna Plc.
It is not also all for 7-Up Bottling Company and Oando, both of which are billed to exit the NSE Pension Index. Taking their places are: Honeywell Flour Mills Plc; and International Breweries; just as Lafarge Africa (Lafarge WAPCO) is replacing 7-Up Bottling Company on the NSE Lotus Islamic Index.
“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,” the statement by Olumide Orojimi, Head, Corporate Communications at the NSE added.
The stocks, the exchange stressed, “are selected based on market capitalization and liquidity. The liquidity is based on the number of days the stock is traded during the preceding two quarters.
“To be included in the index, the stock must have traded for at least 70 per cent of the number of trading days in the preceding two quarters,” the statement added.
The Nigerian bourse began publishing the blue-chip NSE-30 index in February 2009 with index values available from January 1, 2007; followed on July 1, 2008, by four sectoral indices and one more index in 2013, with a base value of 1,000 points, “designed to provide investable benchmarks to capture the performance of specific sectors.”
The Insurance and Consumer Goods sector index, it noted, is made up of the 15 most capitalized and liquid companies; just as the Banking and Industrial Goods sector index, comprise of 10 most-capitalized and liquid companies, while the Oil & Gas sector index, is comprised the seven most capitalized and liquid companies.
“The compiler of the indices maintains the right to modify the circulated selection above in connection with any mergers, takeovers, suspension or resumption of trading or any other company structure changes during the period before the effective date of the annual review,” the statement added.