Standard & Poor’s (S&P) announced the launch of its S&P Japan 500 index covering about 88% of the Japanese equity market.
The company said the new index builds on the S&P/TOPIX 150 large-cap index, the S&P Japan MidCap 100, and the S&P Japan SmallCap 250.
The company said its new product is designed to serve as an investable index by adjusting shares of constituent companies for free float. The S&P Japan 500 also offers greater flexibility by covering large, mid and small cap segments of the market.
Like its forerunner, the S&P/TOPIX 150, which has f utures and Exchange Traded Funds (ETFs) trading on the T okyo S tock E xchange and in the US the S&P Japan 500 has high liquidity to s upport the development ofindex-linked products, S&P said.
Toyo Keizai, which is partnering with S&P on the new product, has agreed to provide its database services for the maintenance of the S&P Japan 500, along with marketing support of these newly created S&P indices in Japan.
The S&P Japan 500 will bemaintained by the S&P Japan Index Committee that will aim to apply the following guidelines to the index:
- investability or free float liquidity
- sector balance
- profitability or viability
- low turnover.
Standard & Poor’s defines the universe of eligible companies as any company trading on the Tokyo, Osaka or JASDAQ exchanges, the company announcement said.