Nihon Keizai Shimbun Inc., which controls and operates the 225-issue Nikkei Stock Average on the Tokyo Stock Exchange, said Friday it will replace six of the issues in the benchmark index later this month and in early October.
Industrial Bank of Japan, Dai-Ichi Kangyo Bank and Fuji Bank will be delisted Sept. 22 as they are to form a new holding company, Mizuho Holdings.
The three banks will be replaced in the index the same day by Bank of Yokohama, Toyo Trust & Banking and Shinko Securities.
On Sept. 26, KDD, which will merge with DDI, is to be replaced by Alps Electric.
Meanwhile, as a result of a periodic review of the Nikkei components, Nihon Keizai Shimbun said it has decided to add Mizuho Holdings and Secom to the key index as of Oct. 2, after deleting Tekken, a midsize contractor, and Japan Securities Finance.
“Since Mizuho Holdings is formed by three former components and is considered to retain a high level of liquidity, it is added in the process of periodic review. Secom is added in re-balancing among the industrial sectors,” it said in a press release.
“(The) consumer goods sector to which Secom belongs is underweighted at the time of review,” it said.
On Tekken and Japan Securities Finance, it said they are to be deleted.
due to a “relative decline in liquidity or sector re-balancing.”
The company, which owns and runs the Nihon Keizai Shimbun business daily, adopted new component selection rules in April. Under these, TSE stocks will be ranked based on their market liquidity in the past five years instead of the past 10 years, and on the value of overall transactions instead of the number of stocks bought and sold.
Price stability of a stock will also be taken into account.
The top 450 issues fulfilling the criteria will be grouped as “high-liquidity issues,” of which the top 75 will automatically be included in the Nikkei.
The remaining 150 issues to make up the 225-issue index will be periodically chosen from the Nikkei’s six industry sectors.
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