Vetiva, CGF Bourse, IC Securities unveil West Africa equities index
By Kayode Tokede
CGF Bourse (Dakar), IC Securities (Accra) and Vetiva Capital (Lagos), have co-created the VCI West African Equity Index, which is intended to serve as an investable benchmark for the performance of equity investments across West Africa.
Head of Sub-Saharan Equities Coverage at Vetiva Capital, Mr. Luke Ofojebe, said: “The VCI West African Equity Index captures and represents the most capitalised and liquid stocks across West Africa’s equity markets and comprises 17 stocks selected from the Nigeria Exchange Group (NGX), the Ghana Stock Exchange (GSE) and the Bourse Régionale des Valeurs Mobilières (BRVM) – the regional stock exchange serving member states of the West African Economic and Monetary Union (WAEMU).”
According to him, the components of the index account for 47 per cent of the market capitalisation of the three exchanges and represent a diversity of sectors.”
Speaking on the index composition, Investment & Corporate Advisory Director at CGF Bourse, Cheikh Mboup, said: “The index comprises eight stocks from the NGX, four from BRVM and five from the Ghana Stock Exchange, with their prices all referenced in United States Dollars, with the selection criteria including capitalisation; liquidity; and diversified sector representation.”
Mboup explained that the index will be reviewed semiannually, in March and September each year, with first review date being September 2022.
Although the VCI West African Equity Index was launched on September 2, 2021, back-testing was used to evaluate the performance of the index prior to its launch date.
According to Executive Director, Global Markets at IC Securities, Randy Ackah-Mensah, “The results of the back-testing revealed that the index gained 0.76 per cent in 2019, while it was down 7.89 per cent in 2020, which was not surprising as the pandemic weighed on global equities last year.
“Meanwhile, in the first half of 2021, the index returned 10.77 per cent, largely driven by economic recoveries across the West African region,” Ackah-Mensah said.
The VCI West African Equity Index shows a diversified sector representation. For instance, the telecommunications sector makes up 29 per cent of the index as at the base date, while banking, consumer goods and industrial goods sectors account for 27 per cent, 17 per cent and 12 per cent respectively, with other sectors accounting for the remaining 15 per cent.
