Equity trading on the Nigerian Exchange (NGX) was buzzing early on 4 September ahead of the exchange’s return to the FTSE Russell Frontier Markets Index, effective from market open on 21 September. The inclusion was confirmed by the index company, part of the London Stock Exchange Group, in a market notice published on 27 August.
Equities linked to the FTSE Russell Index opened sharply higher on Friday morning, according to a recent story by Iheanyi Nwackukwu in Business Day Nigeria: “The morning surge reflects broad-based market momentum as traders step in aggressively following recent economic data and shifting global sentiment.”
Temi Popoola, Group MD/CEO, NGX Group, said in an NGX press release: “ ..the real significance of returning to Frontier Market status is the opportunity it creates for the next phase of our market’s development. We have to turn greater international visibility into broader participation, deeper liquidity and more capital for Nigerian businesses.
“Our ambition is to build a market that is increasingly competitive globally and more relevant to Nigeria’s economic growth. We are encouraged by the continued support of the Federal Government and the commitment of stakeholders across the market as we work towards that ambition.”
The exchange noted that rival global index provider S&P Dow Jones Indices has also put Nigeria on its watch list for potential reclassification to frontier market status as part of its 2027 Country Classification Annual Review.
This move could bring some $800 million in foreign investment flows, writes Dara-Abasi Ita in Forbes. He cites a figure from Cordros Research, an arm of Cordros Capital which also includes a stockbroker, which suggested putting Nigeria into the index could mean $800 million -$1.04 billon of new funds for buying shares in the index. His report adds that although the market has soared this year, that has been mostly driven by the enthusiasm of domestic investors. Statistics published by the Securities and Exchange Commission of Nigeria (SECN) show that foreign investor accounted for less than 11% of turnover in the first seven months of 2026. See also this article in Leadership Nigeria.
Shares entering the index
FTSE Russell includes 31 Nigerian shares in its FTSE Frontier Index Series, according to this story by Samson Akintaro in Nairametrics.
Ten large-capitalization stocks are set to enter the Frontier Index Series: Aradel Holdings, Dangote Cement, First HoldCo, Guaranty Trust Holding Company (GTCO), MTN Nigeria Communications, Nestlé Nigeria, Nigerian Breweries, Presco, Stanbic IBTC Holdings and Zenith Bank.
There are also 10 mid-cap stocks: Access Bank, Dangote Sugar Refinery, FCMB, Fidelity Bank, Guinness Nigeria, Oando, Okomu Oil Palm, Unilever Nigeria, United Bank for Africa and Wema Bank.
The 11 small cap stocks are: Custodian And Allied Insurance, Fidson Healthcare, Julius Berger, National Salt, Nigerian Aviation Handling, Nigerian Exchange Group, Sterling Financial Hold Co, Transnational Corp, U A C Nigeria, United Capital PLC and Vitafoam Nigeria.
This interesting article by Dorcas Adeodun for Billionaires Africa explains why some companies did not make the index. BUA Cement and BUA Foods are among the largest companies by market capitalization, but their free float, or the proportion of shares available for active trading by the public, did not meet the requirements of the index.
Seplat Energy is not there because it has a dual primary listing on the London and Nigerian exchanges, and to avoid double counting because its primary trading volume and international holdings are captured in UK indices such as FTSE UK and Global Energy. Conglomerates such as Transcorp and UBA have not met the criteria for consistent trading turnover over a 12 month period.
However, some of these could be included in future index reviews.
Why does the index matter?
Many investment funds and other investors benchmark their buying according to global or local indices, or they may buy or track the index, meaning they will buy the shares that are included in the index. Increased buying pressure is likely to push up share prices (see note below) and the companies will have more international visibility and appeal.
FTSE Russell, LSEG’s global index leader, provides innovative benchmarking, analytics and data solutions for investors worldwide. FTSE Russell calculates thousands of indexes that measure and benchmark markets and asset classes in more than 70 countries, covering 98% of the investable market globally.
FTSE Russell index expertise and products are used extensively by institutional and retail investors globally. Approximately $20 trillion is benchmarked to FTSE Russell indexes. Leading asset owners, asset managers, ETF providers and investment banks choose FTSE Russell indexes to benchmark their investment performance and create ETFs, structured products and index-based derivatives.
How Nigeria got back in the index
FTSE Russell removed Nigeria from the Frontier Market index to “unclassified” in September 2023. This was due to the difficulties, including significant and continuing delays, that international institutional investors faced in getting their capital back after selling shares and other securities, when foreign exchange (FX) was hard to get and they were offered unacceptable FX rates.
In October 2025, FTSE Russell put Nigeria on its “watch list” for potential reclassification following liquidity improvements for foreign exchange, and growing international confidence as investors were more able to take out their capital and found the market more accessible.
FTSE Russell made the formal announcement in April 2026 that Nigeria would rejoin the index, setting the date.
However, FTSE Russell later warned on 30 June that it was subjecting this to further review after Nigeria transitions from T+2 (2 days after trading) settlement to T+1 (day after trading). See the ACMN story ahead of the change, which happened without major problems on 1 June.
FTSE Russell investigated whether T+1 would mean a prefunding market, where investors have to deposit their funds in local currency with the capital market before they make a trade, rather than paying for it after it has been executed, for instance the second day (T+2) and would mean it was ineligible for the index. the effective date. This also reflected concerns from fund managers and global custodians about the transition.
The NGX and the SECN launched extensive talks with FTSE Russell, institutional investors and custodians, including a detailed meeting in July. The NGX Group listened to and addressed concerns and indicated that the changes are to comply with international best practices and there is no requirement for prefunding. The SECN clarified this in a SEC market circular on 12 August which added that settlement deadline for equities and commodities settled at the Central Securities Clearing System (CSCS) was 5pm on the day after trading. The US, Canadian, Mexican and Argentinian markets moved to T+1 settlement in May 2024 and the UK and Europe aim to make the change in October 2027.
The NGX said in its press release that it also met President Bola Ahmed Tinubu on 6 August to brief him on developments and reforms across the Nigerian capital market and discuss the market’s role in mobilising long-term capital to support Nigeria’s economic transformation agenda. In January, the President said (see ACMN story) “With Nigerian Exchange crossing the historic NGN 100trn market capitalization mark, the country is witnessing the birth of a new economic reality and rejuvenation.”
In the year to date (to 3 September), the NGX All Share Index is up 58.3% for local investors and 72.6% to investors who count returns in USD, according to figures from African Markets website, and is Africa’s top exchange by USD returns.
Caption: Inclusion in the index could mean more liquidity on the Nigerian Exchange NGX (photo: Depositphotos).
Note: For background reading on FTSE Frontier 50 index impact, see paper by Ernest Biktimirov (Brock University, Canada) and Pyemo N Afego (University of Tokyo) (2026): “Is there an index effect in frontier markets?” In International Review of Economics & Finance, September 2026, the paper is accessible here.