An Overview on the Impact of the Nigerian Exchange (NGX) Lotus Islamic Index (NSE LII) on the Nigerian Capital Market

Abstract

While there are some industries that deal with items that are categorically prohibited by Shari‘ah, there are several companies whose business practices are quite Shari‘ah compliant and are suitable for investment by the ethically-minded investing public both at local and foreign levels. This study examines how impactful the Nigerian Stock Exchange Lotus Islamic Index [NSE LII] is on the Nigerian Capital markets. Has the Nigerian Stock Exchange [NSE] made the Nigerian capital markets more accessible and more inclusive by updating the index rules for its Nigerian Stock Exchange Lotus Islamic Index [NSE LII]? Has the premier Islamic ethical index [NSE LII] been more representative of the investible universe of Shari‘ah compliant stocks as the Nigerian capital market expands? While it makes use of the library, historical and analytic methods, scholarly answers are provided to the raised research questions. The findings show that the Nigerian Exchange Lotus Islamic Index, as one of the global major ethical unit stock market indices, has made the Nigerian capital market more accessible and more inclusive. Since the legislation gaps are no more obstacles to the Islamic securities in Nigeria, the obstacle remains the knowledge gap. So, it is recommended that the investors seek the professional advice from the professional assets managers who possess the know-how of the Islamic finance to profitably handle their investing portfolio.