TOKYO -- Nikkei said on Friday that it will alter its capping ratio on the Fast Retailing share price, which is used to help calculate the Nikkei Stock Average, or Nikkei 225, as the weight of the owner of apparel brand Uniqlo exceeded the preset weight cap of 10%.
The weight of Fast Retailing reached 11.4% as of Jan. 31, triggering the cap, starting Apr. 1. In the calculation of the Nikkei 225, the index provider uses the share price and a price-adjustment factor for all component issues. The new price-adjustment factor for Fast Retailing will be 2.4, down from the current 2.7.
Nikkei introduced the capping rule in 2022 to prevent the ratio of certain stocks from becoming excessively high. The rule states that if the weight of a constituent exceeds 10% on the final trading day in July or January, the capping ratio is applied to the constituent issue, either in October or April, when Nikkei conducts periodic reviews.
For details, please visit the Nikkei indexes website.
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