The Nigerian Exchange Limited (NGX) conducted a mid-year review of its market indices, effective July 1, 2025, resulting in the addition and removal of several companies across various benchmark indices. This routine exercise aims to reflect the evolving dynamics of the Nigerian stock market and ensure the indices accurately represent the performance of different sectors and investment strategies. The review impacted a range of indices, including the prestigious NGX 30, sectoral indices like Banking, Insurance, Industrial, Consumer Goods, and Oil & Gas, as well as specialized indices such as the NGX Lotus Islamic, NGX Pension, and various others focusing on specific investment themes like growth, value, and dividend yield.
The NGX 30, a flagship index tracking the performance of the top 30 most capitalized and liquid companies on the Exchange, saw the inclusion of Aradel Holdings Plc, Wema Bank Plc, Conoil Plc, and Julius Berger Nigeria Plc. These additions suggest positive performance and increased market capitalization for these companies, signifying their growing influence within the Nigerian stock market. Meanwhile, the NGX Consumer Goods Index welcomed McNichols Consolidated Plc and Golden Guinea Breweries Plc, reflecting potential growth and investor interest in the consumer goods sector. The insurance sector also witnessed changes, with LASACO Assurance Plc, Fortis Global Insurance Plc, and International Energy Insurance Plc joining the Insurance Index, potentially indicating improved performance and market outlook for these insurance companies. Austin Laz & Company Plc and Notore Chemical Industries Plc were added to the Industrial Index, suggesting positive momentum within the industrial sector.
Several indices remained unchanged during this review. The NGX Banking, NGX Oil & Gas, NGX Pension, NGX Lotus Islamic, Corporate Governance, and NGX Pension Broad indices saw no additions or removals. This stability suggests consistent performance and representation within these specific sectors and investment strategies. The absence of changes might indicate that the current constituents adequately reflect the market dynamics within those segments. Further analysis of individual company performance within these unchanged indices would provide a deeper understanding of the underlying reasons for their stability.
The Afrinvest Dividend Yield Index, which tracks companies with high dividend payouts, saw the addition of Access Holdings Plc, FCMB Group Plc, and Julius Berger Nigeria Plc. These additions highlight these companies’ commitment to returning value to shareholders through dividends, making them attractive to income-seeking investors. The Meristem Growth Index, focusing on companies with high growth potential, welcomed a larger cohort of additions, including Wema Bank Plc, Chemical and Allied Products Plc, Guaranty Trust Holding Company Plc, Fidelity Bank Plc, Transnational Corporation Plc, United Bank for Africa Plc, Unilever Nigeria Plc, and Guinness Nigeria Plc. This suggests a positive outlook for growth within various sectors represented by these companies, potentially driven by factors such as expanding market share, innovative products or services, and strong financial performance.
The Meristem Value Index, which tracks undervalued companies with strong fundamentals, saw the addition of United Bank for Africa Plc, Unilever Nigeria Plc, Guinness Nigeria Plc, and Julius Berger Nigeria Plc. These additions indicate that these companies, despite their strong fundamentals, are perceived by the market as being undervalued, potentially presenting attractive investment opportunities for value investors. The inclusion of these companies in both the Growth and Value indices suggests a balanced outlook, potentially indicating a combination of growth potential and undervaluation, making them appealing to a wider range of investors.
The NGX’s mid-year index review provides valuable insights into the performance and dynamics of the Nigerian stock market. The inclusion of companies in various indices reflects positive sentiment and growth potential within specific sectors, while the unchanged indices suggest stability and consistent performance. These adjustments are crucial for maintaining the relevance and accuracy of the indices, allowing investors to make informed decisions based on reliable market benchmarks. This regular review process underscores the NGX’s commitment to transparency and providing a robust platform for investors to participate in the Nigerian capital market. The changes also highlight the dynamic nature of the market and the importance of ongoing monitoring and evaluation.
