THE Nigerian Stock Exchange (NSE), at the weekend, announced plans to commence its market segmentation tomorrow.
Under the arrangement, the NSE systems and market reports will reflect key changes to the markets, boards and industry sectors.
Also, the Exchange will unveil new parameters for segmenting equities by market capitalisation, and into growth or income stocks.
According to the NSE, the new market segmentation configuration is also designed to create simplicity for investors, adding that “it informs the construction of individual investment portfolios, in terms of asset allocation, providing investors the basic tools for understanding risk diversification”.
The Chief Executive officer of NSE, Oscar Onyema, who confirmed the development at the weekend said: “This is one of the nine projects we are launching this year to substantiate our undertaking to become ‘the gateway to African markets.’”
Head of Strategy at the NSE, N. Yvonne Emordi, was quoted in a press statement signed by Wole Tokede of the Corporate Communications Unit as saying that the development “is a strategic step to align our market with Nigeria’s economic sectors, and with other industry classification standards. We are now better positioned to drive proper allocation of assets to Nigeria”.
Highlights of this exercise include move from three to two markets and rebranded boards in both markets; the pruning of the previous 33 sectors down to 12 sectors, and reclassification of all listed companies within the new sectors; as well as a standard for defining large, mid or small cap stocks, and growth or income stocks.
Speaking with chief executives of quoted firms in Lagos recently, Onyema said despite recent challenges, the capital market remained an indispensable vehicle to ensure Nigeria’s continued development.
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