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Monday, April 22, 2019 / 06:53PM / TheAnalyst / Proshare Markets
Nigeria’s stock market trading platforms have over the years evolved with standard market Indexes showing overall market and sectorial movements, however, to add a fresh perspective to market monitoring, Proshare has created two new Indexes, the “Dangote Index” and the “Elumelu Index” (“Gote” and “Tony”) to track major market action of stocks within a common core share ownership grouping.
These Indexes are designed to monitor trading
actions by equity ownership groupings with large market capitalizations.
Proshare, has observed that the four (4) listed
companies owned by Africa’s arguably largest business mogul, Alhaji
Aliko Dangote, are responsible for over 31% or a third of the N11.2trn
market capitalization of the ASI and influence the ASI’s broad market direction
when significant changes happen to any of the stocks in the Dangote portfolio.
The market Beta between the Dangote companies and
the ASI runs close to a value of one, suggesting a high level of collinear
relationship between the value of Dangote equities (with the heaviest weight
attributed to cement) and changes in market value. Companies included in
the list are: Dangote
Cement, Dangote Sugar, Dangote Flour, and NASCON
ASI Market CAP | 11,172,913,393,038.20 |
| |
Dangote | Market CAP |
DANGCEM | 3,169,534,377,330.00 |
DANGSUGAR | 167,400,000,000.00 |
DANGFLOUR | 50,500,000,000.00 |
NASCON | 50,471,801,100.90 |
TOTAL | 3,437,906,178,430.90 |
Weight | 30.77% |
Source: NSE, Proshare markets as at April 17, 2019
Index Rationale
Since Dangote’s listed companies collectively
influence about a third of the equities market by capitalization news and
information concerning the group should be a good predictor of potential market
direction by volume and perhaps value. For investors interested in Index-linked
securities, a Dangote
Index would give some indication of
market direction and likely bullish and bearish turning points.
Of course it should be noted that events specific
to Dangote’s corporate entities will likely have more direct effects on the
companies themselves than the market as a whole. But whatever moves prices of
the Dangote Group (particularly the cement company) will have knock-on market
consequences for the ASI, the size of the pressure will, however, depend on the
nature of the events.
In this light, to provide unique perspective to market movement, Proshare has decided to create a value-weighted Dangote Index to compare with movements of the daily ASI and provide investors with signaling information to guide market action. In addition to the Dangote Index an “Tony Index” which is also a value-weighted equity Index will be calculated and monitored daily along the same lines as the Dangote Index.
ASI Market CAP | 11,172,913,393,038.20 |
| |
Elumelu | Market CAP |
UBA | 235,816,921,093.00 |
TRANSCORP | 47,975,315,810.46 |
TRANSCOHOT | 41,042,181,060.00 |
AFRIPRUD | 8,360,000,000.00 |
UBCAP | 17,340,000,000.00 |
TOTAL | 350,534,417,963.46 |
Weight | 3.14% |
Source: NSE, Proshare markets as at April 17, 2019
These Indexes do not represent an attempt to provide either buy, sell or
hold advice to equity investors but simply indicate large cap equity market
guidance. The Indexes will be Value-weighted and adjusted for price changes
daily. At times when the Indexes show emergent trends in contrast to overall
mainboard movement, a technical brief would accompany the Index to explain
market adjustments and provide perspective and context. The Indexes do not
represent an official Index of any Exchange but are the product of Proshare
research and markets groups.
Existing Indexes on the Nigeria Stock Exchange (NSE)
1. NSE 30 Index
2. NSE 50 Index
3. NSE Banking Index
4. NSE Insurance Index
5. NSE Oil and Gas Index
6. NSE Consumer Goods Index
7. Lotus Index
8. ASEM Index
9. Afrinvest Bank Value Index
10. Afrinvest Dividend Yield Index
11. Meristem Growth Index
12. Meristem Value Index
Connecting The Dots
To provide
additional perspective to the Indexes that measure market movement (ASI, NSE30,
NSE50, ASEM Index, Lotus Index, etc) the Proshare Indexes give investors a
different perspective of the forces that drive market performance. Large cap
equities associated with core key man interests reveal the impact of business
decisions of economically important individuals on the performance of the NSE
ASI.
Visit Dangote Cement Plc IR Page in Proshare MARKETS
Graph – One Year Share Price Movement
Click to enlarge
Visit Dangote Flour Mills Plc IR Page in Proshare MARKETS
Graph – One Year Share Price Movement
Click to enlarge
Visit Dangote Sugar Refinery Plc IR Page in Proshare MARKETS
Graph – One Year Share Price Movement
Click to enlarge
Visit NASCON Plc IR Page in Proshare MARKETS
Graph – One Year Share Price Movement
Click to enlarge
Visit UBA Plc IR Page in Proshare MARKETS
Graph – One Year Share Price Movement
Click to enlarge
Visit Transcorp Plc IR Page in Proshare MARKETS
Graph – One Year Share Price Movement
Click to enlarge
Visit Transcorp Hotels Plc IR Page in Proshare MARKETS
Graph – One Year Share Price Movement
Click to enlarge
Visit Africa Prudential Registrars Plc IR Page in Proshare MARKETS
Graph – One Year Share Price Movement
Click to enlarge
Visit United Capital Plc IR Page in Proshare MARKETS
Graph – One Year Share Price Movement
Click to enlarge
Methodology of the Index
The
methodology of the Indexes follows the standard formula for value-weighted
Indexes using values for January 2, 2019 as base values for all the equities
listed on the Nigerian Stock Exchange (NSE) for which Aliko Dangote or Tony
Elumelu have significant equity ownership and subsequently setting the base
value the Index to 100.
Contact Us
You
may wish to contact any of the following analysts below for clarification or
other enquiries concerning the Indexes:
Reshu
coo@proshareng.com
Grace
market@proshareng.com
Saheed
research@proshareng.com
Teslim
content@proshareng.com
To Receive a Copy of Index Reports
To
receive copies of the periodic reports on the “Gote” and “Tony”
Indexes; subscribe to Proshare Markets
Related Video
Related News
1.
Investors Gain N197.51bn WoW
As NSEASI Inches Up By 1.78% To Close The Week Positive – Apr 18,
2019
2.
NSE Rebalances Its Corporate
Governance Index – Dec 31, 2018
3.
MSCI Releases Its 2018
Semi-Annual Index Review – Nov 24, 2018
4.
NSE releases interpretative
guidance on Index Circuit Breakers Rule – Feb 06, 2016
5.
The Launch of the NSE Premium
Board and Its Tracking Index - TNI Q3/E9 – Aug 26, 2015
6.
DANGFLOUR declares N1.2bn PAT in 2018
Audited Results,(SP:N8.50k)
7.
DANGSUGAR Declares N21.98bn PAT in
2018 Audited Result,(SP:N14.20k)
8.
UBA Declares N78.6bn PAT in 2018
Audited Results,Proposes N0.65k Final Dividend Per Share
9.
Dangote Cement Declares
N390.33bn PAT in 2018 Audited Results; Proposes N16.00k Final Dividend
10. UBCAP declares N4.338 billion Profit
in 2018 Audited Results; Declares N0.30K Dividend(SP:N3.47k)
11.
AFRIPRUD Declares N1.95bn PAT
in Q4'18 Results; Proposes 50k Final Dividend (SP:N4.40K)
12. TRANSCORP Declares N20.62bn PAT
in 2018 Audited Results,(SP:N1.71k)
13. TRANSCOHOT Declares N3.714 bn
PAT in the 2018 Audited result,(SP:N6.10k)
14. UBCAP declares N4.338 billion
Profit in 2018 Audited Results; Declares N0.30K Dividend(SP:N3.47k)