Nigeria Stock Exchange, MSCI sign agreement on developing new market indices

MSCI Incorporated, a leading provider of investment decision support tools worldwide, and the Nigerian Stock Exchange have signed a “strategic co-operation agreement to develop and market a co-branded “family of indexes” for the Nigerian equity market. 

Based on the agreement, existing and future indexes would be branded as the MSCI/NSE Indexes, including the flagship NSE 30 Index and NSE 50 Index, which will become the MSCI/NSE 30 Index and the MSCI/NSE 50 Index, respectively, a statement announcing the development said. According to it, additional indexes will also be jointly developed and inaugurated in the future based on client demand and market development. The indices will be used as performance benchmarks and as the basis for index-linked products for investors seeking exposure to the Nigerian capital markets. 

The Managing Director and Head, MSCI’s Product Group, Baer Pettit, was quoted as saying, “As the largest economy in Africa, Nigeria is increasingly positioning itself at the centre of the development of the region’s capital markets. “MSCI is very proud to establish a strategic relationship with the Nigerian Stock Exchange, and we look forward to working with them to raise the profile of these indices around the world.  “The combination of MSCI’s emerging and frontier markets index expertise and NSE’s position as one of the leading exchanges in the region will, we believe, deliver high quality indices for both international and domestic investors.” 

On his part, the Chief Executive Officer of the NSE, Mr. Oscar Onyema, said the Exchange was proud to collaborate with MSCI, which was one of the top and most respected Index providers for global stock markets. He was quoted as saying, “Our Collaboration provides the global investing public, listed companies and other stakeholders in the Nigerian market access to MSCI’s high quality products and internationally recognised brand.” “The Nigerian Stock Exchange, in cooperation with MSCI, will continue to innovate and bring products to market that will increase the sophistication of African markets, and continue to establish Nigeria as the market for entrepreneurial growth.”  

According to the statement, the MSCI/NSE indices will be calculated and disseminated by MSCI based on the same industry-leading standards that apply to the MSCI indices. MSCI will commercialise the indices outside Nigeria while the NSE will continue to serve clients in Nigeria.  

We believe that this new development will be positive for the development of the Nigerian Stock market as MSCI’s global profile will help enhance the visibility of Nigerian shares in international markets. This may in turn encourage more international investors to partake in trading securities on the NSE potentially enhancing liquidity and demand for equities and other securities.