Peter OBIORA InvestAdvocate

Lagos (INVESTADVOCATE)-The Nigerian Stock Exchange (NSE) Lotus Islamic Index (NSE LII) has been described as a diversification tool for Foreign Investors and Portfolio Managers from the Gulf and Asian Countries, amongst others who seek to profitably invest in Emerging African Markets in accordance with the principles of the Shari’ah.

Hajara Adeola, Chief Executive Officer/ Managing Director (CEO/MD) of Lotus Capital Limited, Developers and Managers of the Shar’ah Compliant Index, the NSE LII said this in her presentation to Stakeholders at the NSE on Thursday at the launch of the NSE LII.

“NSE LII will serve as an important diversification tool for Foreign Investors and Portfolio Managers from the Gulf and Asian countries, amongst others who seek to profitably invest in Emerging African Equities Markets in accordance with the principles of the Shari’ah” she said.

According to Hajara Adeola, the NSE LII could be as a basis for creating Mirror Funds, Index Funds, Exchange Traded Funds (ETF) etc, which would broaden the range of Financial Instruments traded on the Floor of the Nigeria’s Bourse.

“With the release of Non-Interest Banking guidelines by the CBN, we anticipate increased awareness towards Islamic Finance; hence the NSE LII would act as an important benchmark for Islamic Equity Investments in Nigeria” Hajara Adeola said.

She affirmed that the NSE LII can also act as a reference point for the subsequent introduction of other Indices such as the Sukuk (Islamic Bond) index.

“The Islamic Index could serve as a general benchmark for ‘Ethical’ Funds” she said.

In his speech, Oscar Onyema, Chief Executive Officer (CEO) of the Nigeria’s Exchange said the launch of the NSE LII marks another milestone in the Rebirth, Growth and Transformation of the Nigerian Capital Market (NCM). “This is one of the many steps we are charting to bring to fruition our vision of becoming the gateway to African Markets” he said.

“We remain committed to our promise of providing a first rate platform that will enable all stakeholders build and grow their businesses. The launch of an Islamic Index is a part-fulfillment of this promise” the NSE CEO affirmed.

Onyema said the Index can serve as an important diversification tool for ethically minded investors and Portfolio Managers both locally and from around the world, who seek to profitably invest in Emerging African Equities Market.

He further affirmed that there are several ways investors in the Market will benefit from this Index. “The Islamic Index could serve as a general benchmark for ‘Ethical’ Funds and could also be seen as a basis for creating Mirror Funds, Index Funds, Exchange Traded Funds, Index options, etc., which would broaden the range of financial instruments traded on The NSE” he said.

“We are positive that this bold step will bring on board various ethical investors who were previously not sure about the suitability of investing in Stocks to embrace the Market –this directly makes our Market more accessible and more inclusive” the NSE CEO affirmed.

Onyema said by this launch, the NSE has increased the variety of its indices to seven (7), giving opportunities to investors with varied investment appetite and interests that track the NSE’s indices. “As you may be aware, five (5) of our indices were developed in partnership with a Foreign Partner, Bloomberg. The NSE LII is the first index we are developing with a Local Partner.

“The NSE Lotus Islamic Index (NSE LII) consists of Companies whose business practices are in conformity with the principles of Shari’ah and we believe that it will increase the breadth of the Market and create an important benchmark for investments as the alternative Non-Interest investment space widens” Onyema affirmed.

Click here to download Presentation