Nigeria Makes MSCI Frontier Markets’ List

• Nigeria Makes MSCI Frontier Markets’ List

The MSCI has announced its decision to retain the MSCI Nigeria Indices in the MSCI Frontier Markets Indices.

The market will be removed from the review list for potential reclassification to ‘standalone’ status.

In a notice on Friday, the MSCI said it would also no longer apply the special treatment for the MSCI Nigeria Indices which was announced on April 29, 2016.

More specifically, and as part of the upcoming November 2017 Semi-Annual Index Review, the MSCI said it had decided to implement all index review changes, including changes in the ‘’Number of Shares and Foreign Inclusion Factors’’ that was postponed since April 29, 2016.

These changes will be made for securities classified in Nigeria in the MSCI Nigeria indices and in indices which Nigeria is a component of.

Index review changes for the MSCI Nigeria Indices will be announced together with the November 2017 Semi-Annual Index Review announcement on November 13, 2017, according to the organisation.

As a reminder, the MSCI Nigeria Indices were added to the review list for potential reclassification to Standalone status in September 2016 due to challenges in the foreign exchange market leading to impairment in the ability of institutional investors to repatriate capital.

On April 21, 2017, the Central Bank of Nigeria announced the establishment of the Investors’ and Exporters’ FX window which was aimed at improving liquidity in the foreign exchange market.

Market participants have indicated that since the establishment of the window, funds can be repatriated at close to the official exchange rate.

The concerns on the spreads and delays, which investors have earlier experienced, have also eased.

The MSCI recently increased the weighting assigned to Nigerian stocks to 7.9 per cent from 6.5 per cent previously in its frontier markets’ basket of equities.

The index, designed to track and measure stock markets, was rebalanced by Morgan Stanley, and the new weightings took immediate effect.

The MSCI Frontier Market Indices Nigeria comprises of 16 companies listed on the Nigeria Stock Exchange, including Nigerian Breweries Plc, Guaranty Trust Bank Plc, Zenith Bank Plc, Nestle Nigeria Plc, Dangote Cement Plc, Forte Oil Plc, Seplat Petroleum Development Company Plc and FBN Holdings Plc.