Tokyo exchange to name hundreds of firms it will remove from its Topix index
07/10/2022 02:12
By Junko Fujita
TOKYO, Oct 7 (Reuters) - The Tokyo Stock Exchange (TSE)
is set to announce on Friday the names of hundreds of companies
that it will remove from its Topix index .TOPX of primary
domestic firms, in the bourse's latest reform aimed at
attracting more foreign investors.
The move follows the TSE's biggest overhaul in a decade in
April when it tightened criteria and reorganised its markets
into three - "prime", "standard" and "growth" - to highlight
profitable firms whose governance meets global standards.
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More than 2,000 companies which were on the main board of
the exchange - now the prime market - are in the Topix. They
include firms that did not make the prime market at the reform
and whose shares are now traded on the two other markets.
The TSE, operated by Japan Exchanges Group Inc 8697.T ,
plans to gradually remove firms whose market capitalisation in
tradable shares is less than 10 billion yen ($69 million) from
the Topix index, which is tracked by more than 70 trillion yen
worth of investment vehicles, including exchange-traded funds
mainly held by the Bank of Japan.
"The impact of the reform on the index will be neutral,"
said Tomoichiro Kubota, senior market analyst at Matsui
Securities. "Those who will be eliminated will be sold off,
while those which remain will be bought."
The exchange will reduce the weighting of affected
companies on the Topix gradually until January 2025, when those
companies will be completely eliminated. Companies that fall
short of the criteria can be reviewed next October.
($1 = 145.0200 yen)
(Reporting by Junko Fujita; Editing by Christopher Cushing)
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