On January 4, 2023, the Nigerian Exchange Limited (NGX) announced significant changes to its NGX-30 index following its Full Year Review of Market Indices, as reported by Nkiruka Nnorom. BUA Foods Plc and Wema Bank Plc have been added to the index, reflecting their status as highly liquid stocks, while Union Bank of Nigeria and Oando Plc have been removed. This reshuffle, effective as of the review’s implementation, highlights shifts in market capitalization and liquidity, trends that remain relevant for analysis as of 09:14 PM WAT on August 27, 2025.
Index Rebalancing and New Entrants
The NGX-30 index, which tracks the top 30 companies based on market capitalization and liquidity, underwent its semi-annual rebalancing. BUA Foods and Wema Bank’s inclusion signals their growing prominence in the market, driven by strong performance metrics. Conversely, the exit of Union Bank and Oando indicates a decline in their relative standings, a move influenced by shifts in investor focus and market dynamics.
Additional changes across other indices include MRS Oil joining the oil & gas index, replacing Oando, while African Alliance Insurance Plc was removed from the insurance sector with no new entrant. The NGX Pension index welcomed Airtel Africa Plc and BUA Foods, dropping Honeywell Plc and Conoil Plc. In the NGX Lotus Islamic index, Chemical and Allied Product (CAP) Plc joined, while NAHCo Plc, NASCON Allied Industries Plc, and Presco Plc exited. Berger Paints Plc was added to the NGX Corporate Governance Index, with no removals. The consumer goods, banking, and industrial goods sectors remained unchanged.
Purpose and Methodology
The NGX developed these indices to help investors monitor market trends and manage portfolios effectively. Utilizing a market capitalization methodology, the indices are rebalanced twice yearly—on the first business days of January and July. Launched in February 2009 with data available from January 1, 2007, the NGX-30 provides a benchmark for the Nigerian stock market. The five sectoral indices, introduced on July 1, 2008, with a base value of 1,000 points, track the top 15 companies in insurance and consumer goods, the top 10 in banking and industrial goods, and the top seven in oil & gas, based on capitalization and liquidity.
Market Implications
These adjustments reflect the NGX’s effort to maintain relevant benchmarks for investors, capturing the evolving financial landscape. The inclusion of BUA Foods and Wema Bank suggests investor confidence in their growth potential, while the exits of Union Bank and Oando may prompt a reassessment of their strategies. As of August 2025, these changes continue to serve as a reference point for market analysts tracking long-term trends in Nigeria’s equity market.
The semi-annual rebalancing process ensures the indices remain aligned with current economic conditions, offering a dynamic tool for portfolio management and investment decisions.
