NSE commences consolidation of market segments

DETERMINED tofast-track the rebound of the equities market, the Nigerian Stock Exchange (NSE) has begun market segmentation exercises that will categorise the quoted companies by industry, market capitalisation and whether they are growth or income stocks.The Chief Executive Officer of the Exchange, Mr. Oscar Onyema, said the exercise would consolidate the thirty three segment classification of the Daily Official List into 12 sectors to better reflect global standards and standard international industrial classifications.Onyema explained that the market capitalisation and growth/income segmentation would give the exchange a more detailed understanding of quoted companies, and in turn, provide input into investor education efforts regarding portfolio construction, asset allocation and risk diversification.Speaking recently at a dinner with CEO's of quoted companies, Onyema said: 'The new sectors which include four which are crucial to the Nigerian economy, but are extremely underrepresented in our markets: agriculture (more than 40 per cent of GDP), oil and gas (over 90 per cent of export earnings), telecommunications (over 80 million GSM subscribers and including the fastest growing telecoms operator in sub Saharan Africa) and the utility sector. These sectors are priority areas for us in terms of our efforts to attract new companies to The Exchange,' he said.Onyema noted that the Exchange had also introduced value added services such as corporate governance, investor relations, institutional services, analyst coverage, and corporate access from which, which according to him, the services would form a crucial part of sales and retention efforts.He said the aim was to ensure that all the listed companies realised the value of listing on the Exchange.Onyema noted that the Exchange currently list equities and bonds, but the market was dominated by equities, with minimal trading in bonds.
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