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FTSE and Stanbic IBTC develop Nigeria IPF Benchmark

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FTSE Group has launched the FTSE Nigeria Investable Pension Fund (IPF) Benchmark, which  encapsulates Nigerian listed companies while adhering to National Pension Commission (PenCom) regulation on investment, safeguarding good corporate governance for users.  

It has been created as a replicable index as well as a performance benchmark, in close collaboration with Stanbic IBTC Pension Managers Ltd, Nigeria’s largest pension fund.

The index methodology has been designed to adhere to PenCom’s Regulation on Investment of Pension Fund Assets, ensuring that a strong emphasis is placed on governance and best practice. Benchmark constituents are comprised of FTSE Frontier Index Series companies listed on the Nigerian Stock Exchange, which are then screened for taxable profits, dividend, free float, sector and individual stock weighting.

Jonathan Cooper, Managing Director, Research & Analytics, FTSE, says: “As FTSE’s global presence continues to expand, we are pleased to launch this new innovative benchmark featuring companies from Africa’s largest economy. Corporate governance plays a vital role in all equity markets and is integral to investor confidence, leading to significant demand for benchmarks of this nature. This is reflected in Stanbic IBTC Pension Managers’ support during its development and immediate adoption on completion. We look forward to developing more indices for this exciting market.”

Demola Sogunle, Chief Executive Officer, Stanbic IBTC Pension Managers Ltd, says: “Stanbic IBTC is committed to the growth and development of the financial market. This commitment is part of the reason why we are very excited to be part of this welcome development.  The IPF is necessary for measurement of the performance of the equity portion of Pension Funds. It fulfils that need to have an index that is investable, transparent and independent. We believe that it will encourage more participation in the market as investors would be able to track companies that pension funds typically invest in.”

Chinelo Anohu Amazu, Director General, Pen Com, says: "The Commission is delighted with this commendable initiative by FTSE, as it would provide a good benchmark for Nigerian Pension Fund Administrators (PFAs) and PenCom, to better assess and monitor the performance of the equities portfolio of individual pension funds."

FTSE announced the launch of the FTSE Frontier Markets Index Series in September 2014. The benchmarks covers 26 countries defined as Frontier by FTSE’s Country Classification process, and captures the performance of large, mid and small cap equity securities from eligible markets. There are 39 Nigerian companies currently included in the index.

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