The Nigerian Stock Exchange, NSE, has removed Diamond Bank Plc, Fidelity Bank Plc and Sterling Bank Plc from the NSE 30 index following the bi-annual review of the indices.

The review, which became operational, January 3, also saw the entrance of the only two companies quoted in the agriculture sector – Okomu Oil palm Plc and Presco Plc. Also included was Conoil Plc, a downstream petroleum marketing company.

The NSE-30 and NSE industrial indices are modified market capitalization index with the numbers of included stocks fixed at 30 and 10, respectively. The stocks are selected based on their market capitalization from the most liquid sectors.

The liquidity is based on the number of times the stock is traded during the preceding two quarters. To be included, the stock must have traded for at least 70 percent of the number of times the market opened for business.

The indices, which were developed using the market capitalization methodology, are re-balanced on a biannual basis – on the first business day in January and in July.

Prestige Assurance Plc, Sovereign Trust Insurance Plc and Unity Kapital Assurance were also included in the insurance index, while Equity Assurance, Linkage Assurance and Universal Basic Assurance were exited.

In the NSE pension index, United Capital Plc, Ecobank Transnational Inc and Dangote Flourmill Plc were brought in while Beta Glass Co. Plc, International Breweries Plc and Skye Bank Plc were removed. Forte Oil was included in the NSE Lotus Islamic Index, while Lafarge WAPCO was removed.

Meanwhile, four of the sectors, the NSE consumer goods, the NSE banking, NSE industrial goods and NSE oil and gas sectors remained unchanged.

The NSE observed that “the number of the stocks included in some of the indices may not be practically suitable for optimal portfolio diversification; however, the numbers would be reviewed as sector conditions change. The compiler of the indices maintains the right to modify the circulated selection above in connection with any mergers, takeovers, suspension or resumption of trading or any other company structure changes during the period before the effective date of the annual review.”.