The Tokyo Stock Exchange will exclude nearly 500 companies from the Topix index | Photo credit: Reuters
by Junko Fujita
TOKYO, Oct 7 (Reuters) – The Tokyo Stock Exchange (TSE) is set to drop nearly 500 companies from the Topix index as part of a recent reform aimed at attracting more foreign investors.
High-end restaurant chain Hiramatsu, funeral service provider Kosaido and regional banks Nagano Bank and Tomato Bank are among the 493 companies that will be excluded from the Japanese index, announced JPX Market Innovation & Research, a subsidiary of Japan Exchange Group, owner of TSE.
The move is part of the largest overhaul in ten years of the Tokyo Stock Exchange, which in April tightened its criteria and reorganized its markets into three categories to distinguish lucrative companies whose governance meets international standards.
The Tokyo Stock Exchange plans to gradually remove companies with a market capitalization of less than 10 billion yen (70.4 million euros) from the Topix.
The total capitalization of the companies concerned is 2,000 billion yen, against 385,000 billion yen for all the companies included in the index, according to JPX Market Innovation & Research.
“The impact of the reform on the index will be neutral,” said Tomoichiro Kubota, analyst at Matsui Securities.
The Tokyo Stock Exchange will gradually reduce the weighting of the affected companies until January 2025, when they will be completely delisted from Topix. (Junko Fujita report, French version Laetitia Volga, edited by Sophie Louet)