Fixed Income Indices

Fixed Income Indices

FMDQ activated a strategic partnership with S&P Dow Jones Indices to develop and publish co-branded fixed income indices predicated on a transparent and robust governance framework, as part of the OTC Exchange’s commitment to provide value-adding market development services to its varied stakeholders.

An index is a pool of securities chosen to track an investment theme, such as an asset class or segment, sector, industry, or even strategy. Generally, the goal is to accurately represent the risk/return profile of that theme without necessarily holding every security that might qualify.

Fixed income indices are statistical measures of the value of a selection of fixed income securities which are computed. They measure the performance of the bond market and the short-term money market, allowing investors to gain insight into the performance of the asset class or segment of the asset class on which they are built. They are used as the basis for index-linked investment products and to benchmark the performance of portfolios designed to replicate the performance of a given asset class.

The co-branded indices will track the performance of Nigerian fixed income securities listed on FMDQ OTC Securities Exchange, providing market participants with a transparent and comprehensive series of benchmarks to measure the performance of various issuer categories in the fixed income segment of the FMDQ markets. Market participants will also be able to use the co-branded indices as tools in the creation of index-linked products and derivatives. The co-branded indices shall be calculated in Nigerian Naira.
 
The first fixed income index is the:

S&P NIGERIA SOVEREIGN BOND INDEX

Tracks the performance of local currency denominated sovereign debt publicly issued by the Nigerian Federal Government through the Debt Management Office in the domestic market and listed on FMDQ OTC Securities Exchange. See here for more information.