Japan Exchange Group announced that it would raise Kioxia Holdings' TOPIX free-float ratio from 15% to 50%. This is expected to significantly change the index weighting.
Japan Exchange Group (JPX) announced that it would raise Kioxia Holdings' TOPIX free-float ratio from the previous 15% to 50%. The substantial increase in the free-float ratio is expected to increase the company's index-tracking exposure.
The article also states that buying by passive investment funds on the order of ¥2 trillion is expected in connection with Kioxia Holdings. This has drawn attention to the potential scale of capital inflows into the market.
Kioxia Holdings currently accounts for approximately 0.57% of the TOPIX, and raising its free-float ratio to 50% would represent a substantial expansion of its free-float weighting in the index. This could result in changes to the holdings of index-tracking funds and other investors.
Going forward, trading activity associated with changes to TOPIX constituents and trends among passive funds could affect the market as a whole.