NGX deepens industry knowledge on NGX Pension Broad Index

The Nigerian Exchange (NGX) in partnership with the National Pension Commission and the Pension Fund Operators Association of Nigeria recently held a webinar to deepen knowledge of the NGX Pension Broad Index.

The webinar featured a panel discussion by stakeholders in the pension industry, who highlighted the importance of the benchmark for the industry.

In his presentation, the Chairman of the NGX Index Governance Committee, Abimbola Babalola, said that the benchmark offered pension fund administrators a reference point to measure their performance as well as broaden their choice of securities.

“With this broad index, PFAs now have a benchmark to compare their performance against. It is also like a guide for investors. Instead of cheery picking, they can look at the constituents of the NGX broad benchmark and decide on which stock to pick,” Babalola, who is also the head of Market Surveillance, NGX Regulation.

According to Babalola, the broad index brings in more than 40 securities and has none of the limiting requirements of the NGX Pension Index.

“The index tells you all the securities that have met PenCom requirements. Fundamentally, we screen these companies first. You can use it to predict the direction of the economy. This index can guide you in measuring the import of government policies. The index is a forward-looking one,” he added.

The Head of the Investment Supervision Department, PenCom, Abdulqadir Dahiru, said, “We started on this journey with the NGX and it culminated in the NGX Broad Pension Index which provides diversification. From 40 stocks in the NGX Pension Index, we are now talking about 84 securities. We believe it is more representative and gives PFAs choices and helps them measure their performance.”