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Ten Nigerian companies enter FTSE Russell's frontier index series on Sept. 21, among them Dangote Cement, Nestlé Nigeria and First HoldCo.
The index provider published its September review on Wednesday, classifying the ten as newly eligible large-cap constituents. The others are GTCO, Zenith Bank, Aradel Holdings, MTN Nigeria Communications, Nigerian Breweries, Presco and Stanbic IBTC Holdings.
Newly eligible means the stocks have been cleared for inclusion because their market has been reclassified.
Nigeria moves from unclassified to frontier market status at the opening of trading on Sept. 21. That reclassification is what makes the ten eligible, and it matters because index membership brings automatic buying. Funds tracking the frontier series must hold its constituents, which creates demand regardless of any view on the individual businesses.
Getting there took longer than planned. FTSE Russell announced the reclassification in April, then placed it under additional assessment after Nigeria moved from a T+2 to a T+1 settlement cycle on June 1, shortening the gap between a trade and its completion from two days to one. The concern was that a tighter window could force international institutional investors to fund trades in advance, which would deter them from the market.
It has since concluded otherwise. After engaging Nigerian market authorities and international investors, FTSE Russell said no material settlement, operational or funding problems had emerged since T+1 took effect, and the upgrade would proceed as scheduled.
The frontier series benchmarks large, mid and small-cap companies across eligible frontier markets and underpins index-tracking products.
Two of the ten carry substantial individual ownership. Aliko Dangote holds 87.45% of Dangote Cement, the company that built the fortune Bloomberg valued at $35.3 billion on Aug. 30, and his refinery has separately applied to Nigeria's Securities and Exchange Commission for an October listing targeting a $5 billion raise. Femi Otedola owns roughly 27.6% of First HoldCo, the parent of FirstBank, and chairs it. First HoldCo shares reached a record 159.90 naira on Sept. 1, valuing his holding at about 1.97 trillion naira, roughly $1.42 billion, and he has said he intends to pass 51%.
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