Outcome of MSCI Semi-Annual Review: FBNH, GUINNESS, PZ and FO out of the Frontier Market Index


MSCI has announced the results of its just concluded November 2017 Semi-Annual Index Review with notable changes across its major equity indexes. These changes are expected to be implemented at close of November 30, 2017.

Recall that on October 26, 2017, MSCI had announced that Nigeria was no longer under consideration for reclassification to a standalone index.

Changes to the MSCI Frontier Index

In the MSCI Frontier Index, which captures large and mid-cap constituents across 29 Frontier Market countries, there were five (5) additions to and nine (9) deletions from the index with the three largest additions coming from Argentina, Morocco and Bangladesh. For Nigeria, there were no additions however, four (4) securities were taken out from the index.

FBNH, GUINNESS AND PZ moved to MSCI Frontier Markets Small Cap Index

In addition, the MSCI Frontier Markets Small Cap Index which captures small cap representations across Frontier Market countries had nineteen (19) additions to and seventeen (17) deletions from the index. FBNH, GUINNESS and PZ were moved down to the Small Cap Index whilst CADBURY, DIAMONDBNK, FCMB, GLAXOSMITH, SKYE and STERLNBANK were deleted from the Index.

Proshare Nigeria Pvt. Ltd.

Market Implications

Following the changes to the Nigerian constituents in the Frontier Index, we expect funds that passively track the index to begin underweighting the deleted securities and subsequently phase them out from their buckets overtime. We expect the impact on Forte Oil to be more grave given that it has been completely removed from all MSCI indexes.

On the other hand, we expect the impact on the prices of FBNH, GUINNESS and PZ to be milder as the increased demand from Funds that track the Small Cap index may provide some sort of buffer to the sell-offs from funds that track the main MSCI Frontier market index.

More so, we think these changes in the Frontier Market Index may also favor the remaining Nigerian securities in the index as they are likely to be reweighted upwards . Below is the list of the remaining Nigerian securities in the MSCI Frontier Market Index:


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