Aim of the Index

Japanese stock indices for mid and small cap equities are mostly based on indicators of liquidity, such as market capitalization and trading value, and it is not common to use capital efficiency and financial status as indicators for index constituent selection.
The new index applies the concept of the JPX-Nikkei Index 400, which is an index comprised of highly attractive listed companies, to mid and small cap equities by selecting companies that focus on capital efficiency and investor-oriented management, and aim to foster greater awareness of such issues among corporate executives. The index will also aim to meet the needs of investors looking to invest in such companies.
When selecting issues, we will also consider the liquidity of each issue in the market to facilitate the actual use of the new index for asset management.

Main Points of Index

Index Name JPX-Nikkei Mid and Small Cap Index
Abbrev.: JPX-Nikkei Mid Small
Index Provider Tokyo Stock Exchange, Inc. and Nikkei Inc.
No. of Constituents 200 issues
All the eligible constituents Common stocks whose main market is the TSE 1st Section, 2nd Section, Mothers, or JASDAQ market
Constituent Selection/
Review Method
Constituent selection and review will be conducted as follows.
[Selection Criteria]
Constituents are selected according to the following process and criteria.

  1. Screening
    ① Screening by Eligibility Criteria
    Issues are excluded from selection if they fall under any of the following criteria.
    ・Listed for under 3 years (excluding technical listings)
    ・Liabilities in excess of assets during any of the past 3 fiscal years
    ・Operating deficit in all of the past 3 fiscal years
    ・Overall deficit in all of the past 3 fiscal years
    ・Designation as Security to be Delisted, etc.

    ② Removal of large cap issues
    Issues constituting the top 20% of market capitalization on the base date shall be removed from ①above.
    Notwithstanding the foregoing, those in the top 18% that are issues eligible as constituents of JPX-Nikkei Mid and Small Cap Index on the base date shall be removed.

    ③Screening by Market Liquidity Indicator
    The issue under the 10 billion yen of the market capitalization on the base date and under 15 billion yen of trading value in the one year since the base date shall be removed from ②above. If the number of eligible stocks is fewer than 500 after above procedure, the market capitalization and trading value criteria are lowered by one billion respectively until the number of eligible stock is over 500.

  2. Scoring based on Quantitative Indicators
    Each ranking score shall be given to the issues in (1) above according to the following items and overall score is calculated.
    ・3-year average ROE: 70%
    ・3-year cumulative operating profit: 30%

  3. Scoring based on Qualitative Factors
    Following the scoring in (2), issues will be further scored based on the following 3 items.
    The score is determined so that at most around 10 constituents are different from those chosen with only quantitative score above (2). ・Appointment of Independent Outside Directors (at least 2)
    ・Adoption or Scheduled Adoption of IFRS
    ・Disclosure of English Earnings Information via TDnet (Company Announcements Distribution Service in English)

  4. Determination of Constituents
    Following scoring in (3), the constituents of JPX-Nikkei Mid and Small Cap Index on the base date shall continue to be selected if they are ranked in the top 250. If the number of selected stocks falls below 200 as a result of the selection procedures indicated above, 200 issues will be selected in descending order of high scores as constituents.

[Constituent Review]
Results of the constituent review become effective on the last business day of August each year with the last business day of June as the base date for selection.
Calculation Method Free-float adjusted market capitalization-weighted (with 1.5% cap)
Start of Calculation March. 13, 2017
Real-time dissemination (per sec) of the index via Tokyo Stock Exchange’s Market Information System
Base Date/Base Point Aug. 31, 2016 / 10,000 points

Constituents List with Weight

Constituents List with Weight (As of May 31, 2018) icon-csv

The monthly component weight data (as of the end of the month) for JPX-Nikkei Mid and Small Cap Index will be updated on or after 4:20 pm (Japan time) on the last business day of the following month.
Ex) Monthly component weight data as of the end of October will be updated on or after 4:20 pm on the last business day of November.

Other Referential Data

Factsheet icon-pdf
Data regarding Periodic Review icon-pdf

Calculation Method

JPX-Nikkei Mid and Small Cap Index Guidebook (December 27, 2017) icon-pdf

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