S&P Dow Jones Indices LLC (S&P DJI) and JPX Market Innovation & Research, Inc. (JPXI) today announced the launch of the S&P/JPX Prime Market 250 Index.
The index tracks and measures the performance of the largest and most liquid stocks traded on the Prime Market of Tokyo Stock Exchange, Inc. (TSE). The index is designed to help facilitate transparent access to the ever-evolving Japanese equity market for offshore investors.
In April 2022, TSE introduced three new markets: Prime, Standard and Growth to support the sustainable growth of listed companies, help enhance their corporate value over the medium- to-long term and provide an attractive cash market that is highly supported by a diverse range of investors in Japan and overseas.
The Prime Market is positioned as a market for companies that have appropriate levels of market capitalization (liquidity) and which can be utilized as investment instruments for many institutional investors, as well as achieve higher quality of corporate governance, emphasizing the commitment to sustainable growth and improvement of medium- to long-term corporate value and encouraging constructive dialogue with investors at the center.
The Japanese equity market has been experiencing steady growth and global interest in recent years as institutional investors seek out additional value and diversification opportunities across developed markets.
To reflect this rising offshore interest, the S&P/JPX Prime Market 250 Index uses the Prime Market as an investable base, covering the largest and most liquid 250 constituents – calculated by float-adjusted market capitalization – from a universe of more than 1,500 companies listed on the Prime Market.
“S&P Dow Jones Indices is pleased to continue innovating and growing its cobranded index offerings with JPXI. S&P DJI and Japan Exchange Group, Inc. (“JPX”) have a longstanding partnership since 1999, and share a commitment to advance market education, participation, and transparency in the Asia-Pacific and global markets through our family of independently governed and rules-based S&P/JPX indices,” said Dan Draper, Chief Executive Officer at S&P Dow Jones Indices.
“JPX Market Innovation & Research, Inc. is pleased to offer new investment opportunities in Japanese equities to overseas investors through this index which is based on the Prime Market – the market oriented to companies which center their business on constructive dialogue with global investors – thanks to our partnership with S&P DJI which has extensive experience internationally,” said Miyahara Koichiro, President & CEO at JPX Market Innovation & Research, Inc.
The S&P/JPX Prime Market 250 Index aims to mirror the sector weightings of the broader universe of stocks from the underlying TSE Prime Market Index. This weighting approach helps ensure that, with 250 out of the total universe of over 1,500 stocks, the index will still offer investors and other market participants the same approximate level of industry representation within the Prime Market.
The 250 index constituents cover approximately 84% of the Prime Market universe float-adjusted market capitalization. The index rebalances quarterly to reflect the companies listed on the Prime Market as constituents and to ensure adequate market capitalization and liquidity.
