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The Nigerian Stock Exchange (NSE) and Afrinvest Securities Limited (ASL) have announced the launch of two new factor indices, namely, the NSE-Afrinvest Banking Value Index (NSE-Afr BVI) and the NSE-Afrinvest High Dividend Yield Index (NSE-Afr HDYI). According to a statement released by the NSE on Monday, the indices are available on both the NSE and Afrinvest websites effective from today, January 21.

The indices were designed in response to requests for applicable benchmarks for measuring value in banking stocks and high dividend stock listed on the Nigerian bourse. The NSE-Afr BVI and the NSE-Afr HDYI will serve as tools for investment managers and corporate treasuries seeking appropriate benchmarks to evaluate the performance of their portfolios to a segment of the banking or high dividend orientation as applicable.

The NSE said the indices can also be used as the performance target in index-replicating financial products such as Exchange Traded Funds and Derivatives.

“In view of rising demand for financial products that adequately meet the needs of market participants, particularly investors, the Exchange is pleased to collaborate with Afrinvest West Africa on these novel index strategies,” said Oscar Onyema, Chief Executive Officer of the NSE. “The indices consider the fundamentals of underlying securities. We commend Afrinvest for its product innovation and for leveraging the Exchange’s Index calculation and management expertise.”

According to the Nigerian bourse, the indexes will align with the NSE’s Index committee’s governance standards as with all other NSE indexes.

“On the back of these indices, investors will now enjoy the benefits of proxies that seek out dividend-paying stocks and value-oriented banking stocks listed in Nigeria,” said Ike Chioke, Group Managing Director of Afrinvest West Africa, the parent company of ASL. “We are proud and excited at the rollout of the new indices in collaboration with the Nigerian Stock Exchange. It is our belief that this partnership will serve as a veritable proponent for more forward-thinking initiatives meeting market needs.”

Guidelines and methodologies for the indices are also publicly available on the websites of the NSE and Afrinvest.

“The Exchange is committed to driving sustainability of our marketplace and supporting investable product creation endeavours by stakeholders to enhance the depth of the market. We will continue to welcome innovative solutions to identifiable gaps in the capital market,” Onyema added.