Sapporo Holdings Ltd. (2501), Japan’s fourth-largest brewer, and Mitsui Mining & Smelting Co., the nation’s largest zinc producer, led shares lower in Tokyo on their removal from the MSCI Japan Index.
Sapporo fell 5.9 percent to 289 yen as of 10:26 a.m. in Tokyo trading. Mitsui Mining lost 5 percent to 266 yen. 77 Bank Ltd., a regional bank in the Tohoku area, tumbled 8.2 percent to 325 yen. Twenty shares will be removed from the MSCI Japan Index as of the May 31 close of trading, according to a statement yesterday by MSCI Inc., the index compilers.
The index amendments will likely prompt funds that mirror the MSCI Japan Index, such as the iShares MSCI Japan Index Fund (EWJ), to adjust their holdings in the days leading up to the date the changes take effect.
“It looks like the main reason for this is because their prices fell dramatically, and many of the shares went from being mid-cap stocks to small-cap stocks,” Eiji Kinouchi, chief technical analyst at Daiwa Securities Capital Markets Co., wrote in a report today.
Other companies that will be removed from the index include Canon Marketing Japan Inc. (8060), which distributes all Canon Inc. products in the domestic market, Ito En Ltd. (2593), a beverage maker, and Hankyu Hanshin Holdings Inc. (9042), a railway company which operates in the Kansai region of Japan. No companies will be added to the MSCI Japan Index, MSCI Inc. said.
Canon Marketing declined 3.5 percent to 829 yen, Ito En retreated 3.7 percent to 1,332 yen and Hankyu Hanshin dropped 8 percent to 323 yen.
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