Outline

New Index "JPX-Nikkei Index 400"

Update : Jul. 18, 2014

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Japan Exchange Group, Inc. and Tokyo Stock Exchange, Inc. and Nikkei Inc. will start to calculate a new index "JPX-Nikkei Index 400" from January 6, 2014.

Aim of the Index

The new index will be composed of companies with high appeal for investors, which meet requirements of global investment standards, such as efficient use of capital and investor-focused management perspectives. The new index will promote the appeal of Japanese corporations domestically and abroad, while encouraging continued improvement of corporate value, thereby aiming to revitalize the Japanese stock market.

Main Points of Index

Name JPX-Nikkei Index 400
Abbrev.: JPX-Nikkei 400
No. of
Constituents
400 issues
Eligible Issues TSE-listed issues (1st Section, 2nd Section, Mothers, JASDAQ)
Constituent Selection/
Review Method
Constituent selection and review will be conducted as follows.

[Selection Criteria]
Constituents are selected according to the following process and criteria.

(1) Screening
① Screening by Eligibility Criteria
Issues are excluded from selection if they fall under any of the following criteria.
- Listed for under 3 years (excluding technical listings)
- Liabilities in excess of assets during any of the past 3 fiscal years
- Operating deficit in all of the past 3 fiscal years
- Overall deficit in all of the past 3 fiscal years
- Designation as Security to be Delisted, etc.
② Screening by Market Liquidity Indicator
The top 1000 issues will be selected from those eligible, excluding the above, in consideration of the following 2 items.
- Trading value during the most recent 3 years
- Market capitalization on the base date for selection

(2) Scoring based on Quantitative Indicators
The 1,000 issues selected in (1) will be scored according to the ranking of the following 3 items. (1st: 1000 points – 1000th: 1 point). Then, overall score is determined by aggregating those ranking scores with the following weights. (There are handling rules for the overall scoring with negative ROE and operating profit.)
- 3-year average ROE: 40%
- 3-year cumulative operating profit: 40%
- Market capitalization on the base date for selection: 20%

(3) Scoring based on Qualitative Factors
Following the scoring in (2), issues will be further scored based on the following 3 items. This score is complementarily added to the quantitative scores explained above (2)*.
- Appointment of Independent Outside Directors (at least 2)
- Adoption or Scheduled Adoption of IFRS (pure IFRS)
- Disclosure of English Earnings Information via TDnet (Company Announcements Distribution Service in English)
* The score is determined so that at most around 10 constituents are different from those chosen with only quantitative score above (2).

(4) Determination of Constituents
Following scoring in (3), the 400 issues will be selected in descending order of high scores as constituents.


[Buffer Rule]
A preferential rule for constituents of the prior year selection will be established.


[Constituent Review]
A constituent review will be conducted on the last business day of August each year with the last business day of June as the base date for selection.
Calculation
Method
Free-float adjusted market capitalization-weighted (with 1.5% cap)
Start of
Calculation
January 6, 2014 (Mon.)
Real-time dissemination (per 1 sec.) of the index via Tokyo Stock Exchange’s Market Information System
Base Date/Value
for
Index Calculation
August 30, 2013 / 10,000 points

The Index Value of JPX-Nikkei Index 400

*The index values published in the release dated November 6 were re-calculated retroactively from August 31, 2006 to August 29, 2013 by changing the base date to August 30, 2013 (Base point=10,000). The retroactive calculation of the index value is not based on the rule in “JPX-Nikkei Index 400 Guidebook” completely. (e.g. scoring based on qualitative factors and a preferential rule for constituents of the prior year are notapplied.)

Daily Closing Value of JPX-Nikkei Index 400(from August 30, 2013 to December 30, 2013) CSV

Constituents List with Weight and FFW Ratio Following Cap-adjustment

Constituents List with Weight and FFW Ratio Following Cap-adjustment (As of June 30, 2014) PDF
Change of FFW Ratio Following Cap-adjustment (updated on July 18, 2014) PDF

Other Referential Data

Factsheet PDF
Other Referential Data PDF

Calculation Method

JPX-Nikkei Index 400 Guidebook (June 2, 2014) PDF

News

Jun 2, 2014 Revision of the Guidebook for JPX-Nikkei Index 400
Mar 10, 2014 Calculation of JPX-Nikkei Index 400 in relation to shares of NIPPON TELEGRAPH AND TELEPHONE CORPORATION. (9432)
Dec 30, 2013 The retroactive index value of JPX-Nikkei Index 400
Dec 24, 2013 The FFW Changes for JPX-Nikkei Index 400
Dec 10, 2013 The retroactive index value of JPX-Nikkei Index 400
Nov 25, 2013 Free Float Weight for JPX-Nikkei Index 400
Nov 6, 2013 Start of Calculation and Publication of New Index "JPX-Nikkei Index 400"
Jul. 30, 2013 Outline of New Jointly Developed Index
May. 14, 2013 JPX Group and Nikkei Agree on Joint Development of New Index

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