TOKYO -- Nikkei on Wednesday concluded revisions to rules for calculating the Nikkei Stock Average and selecting its constituents. The revisions introduce a cap on the weight of constituent shares and will be introduced in October.
The cap on the weight of constituents would cut 10% from the share price used to calculate the index if the weight of the stock exceeded the specified threshold at the end of July, the base date for the periodic review. The initial threshold, to be introduced with the review this fall, will be set at 12%, then reduced to 11% in the fall of 2023 and 10% a year later.
Aiming to accelerate the transition of constituent shares, Nikkei will also increase the frequency of periodic reviews and reshuffles, previously conducted every fall, to twice annually: once in the autumn and once in the spring.
Nikkei solicited a range of public opinion before finalizing the changes in May to June, with most responses supporting the changes.
For more details, please visit the Nikkei indexes website.