The Nigerian Stock Exchange (NSE) and Meristem Securities Limited on Monday announced the launch of two new style indices to support product development and investment management.
The Exchange, in a statement in Lagos, said that the indices were NSE-Meristem Growth Index and Meristem Value Index.
It said that these indices would be available real-time on the NSE’s website from March 12.
According to NSE, the style indices were designed in response to the demand for customised indices to support product development and investment management.
The NSE noted that the style indices would provide a benchmark for the market to gauge the performance of value stocks and growth stocks listed on the Exchange.
Mr Jude Chiemeka, NSE Divisional Head, Trading Business Division, was quoted as saying that the exchange was pleased to partner with Meristem Securities in the development of the first style-focused indices.
“We are pleased to collaborate with Meristem Securities in the development of the first style-focused indices to be publicly launched in Nigeria.
“The introduction of the NSE-Meristem Growth and NSE-Meristem Value Indices is a laudable and innovative effort which is long overdue,” Chiemeka said.
He said that these indices provided products strategists and asset managers the leverage to create investment vehicles that democratise professional asset management for the benefit of investors.
The indices are available for licensing and the investing public is encouraged to take advantage of the benefits they provide”, Chiemeka added.
Mrs Kemi Akinde, Group Head Investment Research, Meristem Securities, also noted that the indices were benchmark to track the performance of growth and value stocks traded on the exchange.
“The indices are benchmarks to track the performance of growth and value stocks that are traded on NSE, thereby contributing to the deepening of the equity capital market by providing a leverage for fund managers to build investment products,” Akinde said.
She said that the indices serve as more appropriate benchmarks for fund managers with same investment philosophies to monitor performance.
According to her, it will also provide market data for academics to enrich studies on the performance of growth and value stocks in the Nigerian market.
She said that a multi-factor approach was considered in developing the indices to enhance the index stability and minimize turnover cost.
Akinde added that the NSE-Meristem Growth and Value indices, as with all other NSE indices, would align with the Index committee’s governance standards.