Guinness, Presco, Wema Bank added in NGX review
The Nigerian Exchange Limited has disclosed the results of its full-year 2025 market index assessment, highlighting shifts in market performance among listed firms.
As announced by the Exchange, the updated indices became operative from the beginning of trading on Friday, January 2, 2025.
The assessment indicated that Guinness Nigeria Plc, Presco Plc, and Wema Bank Plc were incorporated into key indices, indicating improved market standings and enhanced performance throughout the year.
These new additions resulted in the exclusion of companies like United Capital Plc, Access Corp, International Breweries, and Stanbic IBTC, among others, as part of the Exchange’s regular index rebalancing procedure.
This reshuffling emphasizes evolving patterns in market capitalisation, liquidity, and sector dynamics within Nigeria's capital market.
In general, the alterations in the index reflect changes in market capitalisation, liquidity, adherence to regulations, and sector performance, impacting both passive and active investment strategies within the Nigerian capital markets.
In the leading NGX 30 Index, which monitors the 30 most capitalised and most liquid stocks on the Exchange, Guinness Nigeria Plc was included, replacing United Capital Plc.
This development indicates heightened investor interest, improved liquidity, or a rise in Guinness Nigeria’s market value during the review phase, with the company also being the top-performing consumer goods stock of 2025.
The removal of United Capital from the NGX 30 does not necessarily indicate a decline in its fundamentals but rather signifies a relative drop in its ranking based on the index's selection criteria during the evaluation period.
Alterations among sector-specific indices were relatively minimal.
In the NGX Insurance Index, Mutual Benefits Assurance was included, taking the place of Guinea Insurance.
In the NGX Oil and Gas Index, Japaul Gold and Ventures Plc took over from MRS Oil Nigeria.
No alterations occurred in the Banking, Consumer Goods, and Industrial Goods Indices, suggesting relative stability in leadership across these segments.
More considerable changes were noted across thematic and compliance-based indices.
Within the NGX Pension Index, which includes stocks that meet Nigeria's pension investment regulations, Wema Bank Plc was accepted, while International Breweries was excluded, reflecting changes in free float, liquidity, and compliance criteria.
Additionally, Presco Plc was added to the NGX Lotus Islamic Index, which monitors Shariah-compliant stocks, reinforcing ongoing investor interest in agriculture-related and export-focused companies.
Further changes transpired across thematic and partner indices.
In the NGX Pension Broad Index, the Nigeria Infrastructure Debt Fund was included, while Regency Alliance and Veritas Kapital were removed.
The Afrinvest Bank Value Index saw additions such as Wema Bank, Jaiz Bank, Access Holdings, and Stanbic IBTC, indicating renewed activity among both tier-one and mid-tier banking stocks.
The Afrinvest Dividend Yield Index brought in Dangote Cement, Okomu Oil, Vitafoam, and Conoil, showcasing persistent investor preference for dividend-yielding stocks in a high interest rate landscape.
Under the Meristem Growth Index, BUA Cement, Lafarge Africa, AXA Mansard, AIICO, CAP, Conoil, and United Capital were added, reflecting strong earnings growth trends among the selected companies.
The Meristem Value Index included ETI, Julius Berger, and NEM Insurance, while Dangote Sugar, TotalEnergies, and Lafarge Africa were excluded.
NGX index evaluations extend beyond routine updates, as they significantly influence investor choices, fund distribution, and stock visibility within the market.
Passive investment vehicles and institutional portfolios frequently align with these indices, resulting in potential inflows into newly included stocks and outflows from those that have been removed.
The Chief Executive Officer of NGX, Jude Chiemeka, remarked that the index review is consistent with the Exchange's aim of enhancing market liquidity and bolstering investor confidence through ongoing product development.
Similarly, the Head of Trading and Products, Abimbola Babalola, explained that the rebalancing process ensures efficient market tracking and proper portfolio alignment.
The Nigerian Exchange Limited reviews and updates the composition of its major stock market indices annually to ensure continued relevance.
As part of the process, the Exchange evaluates companies based on criteria such as market size, share price, trading activity, liquidity, and the proportion of shares available to the public.
Companies that fail to meet these requirements are removed, while those demonstrating stronger performance or growth potential are admitted.
This approach helps ensure that each index accurately represents current market realities and highlights the most investable companies.
For investors, the reshuffle is significant because funds that track these indices may buy shares of newly added companies and sell those that have been removed, potentially influencing share price movements.
For both active and passive investors, the changes serve as useful indicators of which stocks are gaining prominence and which are gradually losing relevance in Nigeria’s equity market.
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