TOKYO -- Nikkei announced on Monday that it will replace three constituent stocks of the Nikkei Stock Average, or Nikkei 225, as part of its annual review, effective Oct. 1.
Keyence, Murata Manufacturing and Nintendo will be added owing to their robust market liquidity. At the same time, Nisshinbo Holdings, Toyo Seikan Group Holdings and SKY Perfect JSAT Holdings will be removed.
To reduce the impact the annual review will have on the market, the number of component stocks replaced will be capped at three. In principle, the current market price will be used as the stock price when adopted, but if the price is extremely high, the price adjustment factor will adjust the stock price below a certain level. Hence, the price adjustment factor will be 0.1 for Keyence and Nintendo and 0.8 for Murata.
Nikkei will also change presumed par values of three constituent issues of the Nikkei Stock Average, aiming to adjust the ratios of the stock split or reverse split the company will carry out. The changes will be 2,500 yen from 500 yen for Sojitz, 50/3 yen from 50 yen for TDK and 10 yen from 50 yen for Toyota Motor, starting Sep. 29. From Oct. 1, presumed par value will be converted to the price adjustment factor.
The "Change from Presumed Par Value to Price Adjustment Factor" and "Maximum number of constituents reshuffle" in the "Changes to the Index Guidebook and the Constituents Selection Rules of the Nikkei Stock Average" announced dated July 5 become effective from this year's annual reshuffle.