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Meristem, NSE launch two indices on investment direction

Meristem, NSE launch two indices on investment direction

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Meristem Securities Limited and Nigerian Stock Exchange (NSE) have developed two new indices that will further enable investors and investment experts to track the performance of certain categories of stocks.

The two new indices – NSE-Meristem Growth Index and NSE-Meristem Value Index, focus on growth and value investment strategies and enable investors to make investments in products that truly match their investment styles and objectives.

The indices, which are calculated and maintained by the NSE, were developed on a style-focused methodology proprietary to Meristem Securities Limited.  The indices will be available real-time on the NSE’s website from tomorrow.

There have been growing clamour for collaboration to develop customised indices to support product development and investment management at the stock market. Broadly, the latest style indices will provide a benchmark for the market to gauge the performance of value stocks and growth stocks listed on the Exchange.

Group Head, Investment Research, Meristem Securities Limited, Mrs. Oluwakemi Akinde, said the indices will further deepen the equity capital market by providing a leverage for fund managers to build investment products.

She noted that the new indices serve as more appropriate benchmarks for fund managers with same investment philosophies to measure effective performance, while they also facilitate better manager selection and appraisal.

According to her, the new indices will also provide market data for academics to enrich studies on the performance of growth and value stocks in the market.

“A multi-factor approach was considered in developing the indices to enhance the index stability and minimise turnover cost,” Akinde said.

NSE Divisional Head, Trading Business Division, Mr. Jude Chiemeka described the  introduction of the NSE-Meristem Growth and NSE-Meristem Value Indices as a laudable and innovative effort long overdue.

He said the indices provide products strategists and asset managers the leverage to create investment vehicles that democratise professional asset management for the benefit of investors, while still following the tenets of classic investment philosophies of growth and value.

He urged the investing public to take advantage of the benefits from the indices to improve their asset selection and management.

“We are pleased to collaborate with Meristem Securities in the development of the first style-focused indices to be publicly launched in Nigeria,” Chiemeka said.

He added that the NSE-Meristem Growth and Value indices, as with all other NSE indices, will align with the index committee’s governance standards, noting that guidelines and methodologies for the indices are publicly available on the NSE and Meristem’s websites.

Meristem Securities Limited for the past 15 years has led remarkable innovation within the capital market ecosystem to create value for investors. In 2014, Meristem was recognised as the first capital market operator to introduce a digital trading platform, and in 2017, it handled the single largest trade in the history of the NSE.

 

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