Nigerian equities are in for a rough time, as FTSE Russell announced on Wednesday that it will assess the status of Nigerian stocks in its “frontier” markets index during its annual review in September.
“The continuing illiquidity in the Nigerian foreign exchange market is resulting in significant delays in the repatriation of U.S. dollars and hence the ability of index trackers to efficiently and cost effectively track Nigerian indexes,” the index provider said in a statement released on its website.
This announcement will come as a shocker to the financial markets, as this is similar to what JP Morgan did last year after announcing that it will phase out Nigeria from its Emerging Market Bond Index citing restrictions on forex transactions and policies of the CBN as its reasons.
FTSE Russell also said that starting from June 20 corporate events such as IPOs and rights issues in Nigeria would not be reflected in the indices.
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