Nigeria has the largest economy in Africa, with more than 220 million people and important oil reserves. For those interested in investing in Nigeria, we will analyze its most important stock market indices.
Nigeria is the most populous country on the African continent, with more than 220 million inhabitants, and its largest economy. Thanks to its young demographics, everything indicates that the importance of the country on the global stage will increase in the coming decades.
Despite the many internal difficulties that exist within the country, the living conditions of the population have been improving little by little over the last few decades.
Nigeria has been able to begin to industrialize, as well as to develop its financial sector. At the same time, it has received foreign investment that has made it possible to produce and export significant amounts of oil.
Thus, hydrocarbon exports account for about two-thirds of government revenue. As a result, there is no need for high tax rates, enabling the private sector to grow faster.
The capital of the country is Lagos, where Nigeria’s main stock exchange is located. The Nigerian Stock Exchange was founded in 1960. Nowadays, the operating company is known as Nigerian Exchange Group, or NGX.
For those interested in investing in Nigeria passively through an ETF, we analyze its most important stock market indices.
The NGX 30 is one of the major stock market indices of the Nigerian Stock Exchange. It is composed of the 30 largest companies listed in the country.
These companies are weighted according to their free float-adjusted market capitalization. Hence, the larger ones tend to dominate the movements of the index. Some of them are Okomuoil and Dangsugar.
Interestingly, the index also includes the Nigerian subsidiaries of many Western companies, such as Total and Unilever.
If you want to learn more about the NGX 30, you can visit the official website of the Nigerian Stock Exchange.
FTSE Nigeria IPF
FTSE Russell, a subsidiary of the London Stock Exchange that produces stock market indices, calculates an index for the Nigerian stock exchange. It is called FTSE Nigeria IPF.
This index is composed of Nigerian stocks that are part of the global FTSE Frontier World index of developing countries. In total, it is composed of between 20 and 25 companies from various economic sectors.
The FTSE Nigeria IPF also has some Nigerian subsidiaries of Western companies, such as Fidelity Bank and even Guinness.
You can find more information about it on the FTSE Russell website.
Finally, the MSCI Nigeria is a stock market index calculated by the US company MSCI. The number of stocks within this index is not constant, but fluctuates over time. Thus, the MSCI Nigeria includes all Nigerian companies that are part of the global MSCI Frontier Markets index.
This index weights stocks based on their free-float-adjusted market capitalization. Some of the largest companies in the index are Dangote Cement and MTN Nigeria.
Additional details about the MSCI Nigeria can be found on the MSCI website.
I hope you found this information about Nigerian stock market indices useful. To learn about stock market indices in other interesting countries, visit this section:
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