The Nigerian Stock Exchange has announced that it has reviewed the eligibility criteria for the NSE Pension Index in line with changes in the regulatory and market requirements. The amended methodology and rebalancing will be effective on Wednesday, July 1, 2020.
According to Mr. Abimbola Abdulazeez Babalola, Chairman, Index Governance Committee, NSE “The review of the Index was made imperative by the need to ensure that it continues to represent the appropriate benchmark for evaluating the Pension Fund Assets equity portfolios and remain suitable for all market stakeholders. The review further takes into consideration the changes in guidelines as specified in the Pension Reform Act 2014 and Amended Regulation on Investment of Pension Fund Assets as advised by the National Pension Commission (PENCOM) as well as market requirements in the amendments”.
The Nigerian Stock Exchange in order to deepen the market introduced the Pension Index and exposed to the investing public in 2015.
The creation of the NSE Pension Index has provided benchmarks tracking mechanisms for Pension Fund Administrators and other Users that follow the PENCOM guidelines.
The NSE pension tracks the top 40 companies in terms of market capitalization and liquidity. It is a total return index and is weighted by adjusted market capitalization, a capping factor, and a free-float factor.