MSCI Inc. (NYSE: MSCI), a leading provider of investment decision support tools worldwide, and The Nigerian Stock Exchange (NSE), today announced a strategic co-operation agreement to develop and market a co-branded family of indexes for the Nigerian equity markets.
Based on the agreement, existing and future indexes will be co-branded as the MSCI/NSE Indexes, including the flagship NSE 30 Index and NSE 50 Index, which will become the MSCI/NSE 30 Index and the MSCI/NSE 50 Index, respectively. MSCI now will be responsible for the construction, maintenance and dissemination of the “new” MSCI/NSE indexes.
Additional indexes will also be jointly developed and launched in the future based on client demand and market development. The indexes will be used as performance benchmarks and as the basis for index-linked products for investors seeking exposure to the Nigerian capital markets.
Benefits of the deal
According to both parties the partnership provides international visibility to Nigerian Indexes. It also gives the construction and composition of our index a lot more credibility giving international investors stronger comfort to use it. This is particularly important for index funds and ETF’s looking at replicating the indexes for their portfolio. For MSCI it will also give them inroads into the largest economy in Africa and perhaps the most active exchange in Africa as well.
The NSE did not reveal when this will take-off and also did not reveal how much it will cost potential subscribers to these indexes. The Nigerian Stock Exchange is the largest exchange in Africa by volume traded, currently trading an average of 437.4 million shares daily. With 253 listed securities, the NSE’s total market capitalization is USD 90.67 billion.
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