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NSE, Meristem launch investment style indexes

11 Mar 2019, 05:59 pm
Financial Nigeria
NSE, Meristem launch investment style indexes

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The two new style indices are the NSE-Meristem Growth Index and the NSE-Meristem Value Index.

Nigerian Stock Exchange

The Nigerian Stock Exchange (NSE) and Meristem Securities Limited, a leading capital market conglomerate, have announced the launch of two new style indices, namely, the NSE-Meristem Growth Index and the NSE-Meristem Value Index. Starting from tomorrow, March 12, the indices will be live on the website of the NSE.

A style index is designed to provide a fair benchmark for managing the performance of investment portfolios. Style indices for the common investment styles, including growth, value and income, exist for most stock exchanges.

NSE, in a statement released on Monday, explained that these style indices are designed in response to demand for customized indices to support product development and investment management. According to the bourse, the style indices will provide a benchmark for the market to gauge the performance of value stocks and growth stocks listed on the Exchange.

“The introduction of the NSE-Meristem Growth and NSE-Meristem Value indices is a laudable and innovative effort which is long overdue,” said Jude Chiemeka, Head of Trading Business Division at the NSE. “These indices provide products strategists and asset managers the leverage to create an investment vehicle that democratizes professional asset management for the benefit of investors, while still following the tenets of classic investment philosophies: growth and value.”

According to the statement, the indices are available for licensing. The NSE-Meristem Growth and Value indices, like other NSE indices, align with the index committee’s governance standards. The guidelines and methodologies for the indices are publicly available on the website of the NSE and Meristem.

“These indices will serve as benchmarks for fund managers, help in effective performance attribution and facilitate better manager selection and appraisal, while also providing market data for academics to enrich studies on the performance of growth and value stocks in the Nigerian bourse,” said Kemi Akinde, Head of Investment Research at Meristem, who explained that a multi-factor approach was considered in the development of the indices to enhance their stability and minimize turnover cost.

Founded in 1994, Meristem Securities Limited offers wealth management services, stockbroking services, registrar services, trustees services and corporate financing. In 2014, it executed the single largest trade in the nearly 60-year history of the NSE between Dangote Industries Limited and Investment Corporation of Dubai. A total of 243,540,000 units of Dangote Cement Plc. at N200 per share, valued at N48.708 billion, were traded on September 8, 2014.

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