Purpose of JPX Prime 150 Index Development
Recently, there has been increasing attention paid to the status of value creation by Japanese companies. For example, only about half of the listed companies in TSE Prime Market have a PBR (price book value ratio) exceeding 1x, which represents expectations of future value creation. Therefore, listed companies are required to be conscious of the cost of equity capital and the stock price as they manage their company.
In light of these circumstances, we have developed a new stock price index which will be composed of stocks selected to represent "Japanese companies that are estimated to create value" from among the top-ranked stocks listed on TSE Prime Market by market capitalization based on two measures of value creation: 1) "return on capital" which is based on financial results, and 2) "market valuation" which is based on future information and non-financial information.
In addition, "return on capital" above refers to the equity spread*1, which is the difference between ROE (return on equity) and cost of equity, as an indicator, whereas "market valuation" above refers to the PBR*2, which is the stock price divided by BPS (Book Value per Share), as an indicator.
The JPX Prime 150 Index is designed to make visible the leading Japanese companies that are estimated to create value, and to make the index and its constituent stocks the target of medium- to long-term investment by institutional and individual investors in Japan and abroad, thereby contributing to the penetration of value-creating management and the enhancement of the appeal of the Japanese stock market.
- When ROE exceeds the cost of equity, which is the return expected by investors, the equity spread becomes positive and the value creation is estimated.
- When the stock price exceeds the BPS, the PBR exceeds 1x, and the value creation is estimated.
Outline of the JPX Prime 150 Index
| Name |
JPX Prime 150 Index |
| Concept |
Index composed of leading Japanese companies that are estimated to create value |
| Number of Constituent Stocks |
150 |
| Calculation Method |
Free-float adjusted market capitalization-weighted |
| Base Date/Base Value |
May 26, 2023/1,000pts |
| Calculation/Distribution of Index Values |
To be calculated and distributed in real time (every second) starting July 3, 2023 |
| Total Return Index |
Available |
| Dissemination of Index Data |
Index data is provided via Index Data Service (paid service). |
Stock Selection Method
JPX Prime 150 Index Chart
Constituents List with Weight
| Constituents List with Weight (As of May 26, 2023) |
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Other Referential Data
| Data regarding Periodic Review |
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| Past Values and Graphs |
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Calculation Method
Use of Index
A license agreement with JPXI is required when using the index for structuring or offering financial products or providing them to third parties.
Applications for license in Japan for ETFs and unlisted public investment trusts linked to this index will be accepted until September 29, 2023, and after that, applications will be suspended for the time being.
Please contact Client Services Dept. JPXI about a license agreement.
Inquiries
Index Business Dept. JPX Market Innovation & Research, Inc.(For the outline of this index)
E-mail:index@jpx.co.jp
Client Services Dept. JPX Market Innovation & Research, Inc.(For the license of this index)
E-mail:index-license@jpx.co.jp
News
JPX Market Innovation & Research, Inc. retains all rights related to this document and it may not be copied, reproduced, or reprinted, in whole or in part, in any form, without the permission of JPXI. This material is prepared for the purpose of enhancing understanding of stock price indices and is not intended as a solicitation for securities trading, etc. JPXI shall not be liable for any costs or damages arising from the use of the information contained herein.
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