NSE deepens market with Pension Index

In a move to deepen the capital market, The Nigerian Stock Exchange (NSE) has introduced the Pension Index.

In the press release by the NSE, stated that the Index values, which would be available as from January 2, 2013 was exposed to the investing public on July 2, 2015.

It stated that the creation of the NSE Pension Index will encourage the development of other products such as Exchange Traded Products (ETP’s) and Index Futures, saying that the Index will provide a tracking mechanism for PFAs, CPFA and others that follow the PENCOM guidelines.

It added that the NSE Pension Index can act as a benchmark for measuring performance and reporting performance to RSA Holders.

The bourse pointed out that the NSE Pension Index includes the top 40 companies in terms of market capitalisation and liquidity, saying “the NSE Pension index also possess some features, which include the stocks are picked based on their market capitalisation from the most liquid sectors, stocks and sectors were selected in line with the Pension Reform guideline, companies to be included must have Free Float Factor of at least five per cent as this is the first index on the NSE that gave consideration to Free Float.

“Others are companies must have paid dividend or bonus at least once in the last five years, it is a Total Return Index so that it can accurately measure equity portfolio performances, which capture returns from dividends, price changes and realized gain and the Total Return Index will only be available end of day, there will be no intra-day values.”