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November 7, 2013

IFRS-based Nikkei index to be launched in Japan

The Japan Exchange Group (JEG) and the media organisation Nikkei will create an index called JPX-Nikkei Index 400, whereby "adoption" or "scheduled adoption" of IFRS, is among the selection criteria for its 400 stocks.

The JPX-Nikkei Index 400 will include companies "with high appeal for investors, which meet requirements of global investment standards," the Tokyo Stock Exchange, a subsidiary of the JEG’s, said in a statement.

The bourse operator said the index aims at promoting an efficient use of capital and investor-focused management perspectives as a means to revitalise the Japanese stock market.

Apart from the adoption of IFRS, other qualitative factors of the index’s scoring include the appointment of at least two outside directors and the disclosure of earnings in English.

In a report published in June, the Business Accounting Council of Japan anticipated that stock exchanges "are expected to take the application of IFRS into account" when selecting companies for the new index.

The JPX-Nikkei Index 400 will start to be measured from 6 January 2014.

Related article

Japan enhance use of IFRS

Related link

Tokyo Stock Exchange

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