Tokyo exchange to remove nearly 500 firms from Topix index (updated)
07/10/2022 08:36
(Updates with the number of companies)
By Junko Fujita
TOKYO, Oct 7 (Reuters) - The Tokyo Stock Exchange (TSE)
is set to remove almost 500 firms from the Topix index .TOPX
of primary domestic firms in the bourse's latest reform aimed at
attracting more foreign investors.
High-end restaurant operator Hiramatsu 2764.T as well as
regional banks such as Nagano Bank 8521.T and Tomato Bank
8542.T are among the 493 companies that will be excluded from
the index, according to JPX Market Innovation & Research, a unit
of Japan Exchanges Group Inc 8697.T .
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 meet the prime market criteria during
the reform and whose shares are now traded on the two other
markets.
The TSE, operated by Japan Exchanges Group, 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 and
Christian Schmollinger)
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Messaging:junko.fujita.reuters.com@reuters.net;))