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FTSE, Stanbic IBTC develop Nigeria pension fund benchmark

By on May 15, 2015

Global index provider, FTSE Group, on Thursday announced the development of the FTSE Nigeria Investable Pension Fund Benchmark, which makes it possible to measure the performance of the equity portion of pension funds.

According to the group, the FTSE NIPF Benchmark is comprised of Nigerian Stock Exchange-listed equities and its constituents fully comply with the National Pension Commission’s investment guidelines.

“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,” it said in a statement.

FTSE further explained that the index methodology had been designed to adhere to PenCom’s Regulation on Investment of Pension Fund Assets, ensuring that a strong emphasis was placed on governance and best practice.

According to the statement, the benchmark constituents are comprised of the 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.

The Managing Director, Research and Analytics, FTSE, Jonathan Cooper, was quoted as saying that the group looked forward to developing more indices for the Nigerian market.

He also stressed that the benchmark and other similar indices promote corporate governance.

He said, “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 the Stanbic IBTC Pension Managers’ support during its development and immediate adoption on completion. We look forward to developing more indices for this exciting market.”

The Chief Executive Officer, Stanbic IBTC Pension Managers Ltd, Demola Sogunle, said Stanbic IBTC was committed to the growth and development of the financial market.

He added, “This commitment is part of the reason why we are very excited to be part of this 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 will be able to track companies that pension funds typically invest in.”

Also, the Director-General, PenCom, Chinelo Amazu, was quoted as saying, “The commission is delighted with this commendable initiative by the FTSE, as it would provide a good benchmark for Nigerian Pension Fund Administrators and PenCom to better assess and monitor the performance of the equities portfolio of individual pension funds.”

The FTSE announced the launch of the FTSE Frontier Markets Index Series in September 2014.

The benchmarks covers 26 countries defined as Frontier by the FTSE’s country classification process, and capture 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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