JPX-Nikkei index 400 selection criteria to be revised.

Byline: S. Kamal Hayder Kazmi

Nikkei Inc. and Tokyo Stock Exchange announced on Friday that they will revise their criteria for selecting the component issues of JPX-Nikkei Index 400, a stock index they jointly develop and operate. Nikkei and TSE will attach greater importance to return on equity - the ratio of net income to shareholders' equity - starting with a periodic review of the constituent stocks in the summer of 2022. When narrowing down targets for selection under certain conditions, Nikkei and TSE will significantly downgrade their assessment of not only issues whose ROE are negative but also those whose ROE are in the bottom 10 percent. The...