Kavan Choksi – What Do You Mean By The Tokyo Price Index (TOPIX) In Japan?
The Tokyo Price Index, commonly known as TOPIX, is a metric for the stock prices listed on The Tokyo Stock Exchange. It is a capital-weighted index that has the listing of all the firms present in the first section of the Exchange. This section is dedicated to all the big firms listed on the TSE into a single group. The second section of The Tokyo Stock Exchange pools smaller companies that remain in the same manner.
Kavan Choksi- Understanding the Tokyo Price Index and its role in the financial markets
Kavan Choksi is an eminent investor, business, and finance expert known for his expertise in economics. According to him, the Tokyo Stock Exchange is the largest in Japan and responsible for the calculation and publication of the TOPIX.
If you compare TOPIX with the Nikkei 225 Stock Average, it is considered to be a more accurate representation of the stock markets in Japan because it displays a fairer depiction of the changes in the stock prices and includes the names of the largest companies that are listed on the Tokyo Stock Exchange. Nikkei, on the other hand, is weighted by the cost of the stocks and comprises the top 225 Japanese blue-chip companies on the Tokyo Stock Exchange.
The TOPIX and the sector indices
The TOPIX displays the present market capitalization of organizations assuming market capitalization as recorded on its base date, January 4th, 1968, is 100 points. This measure is deployed to determine the whole trend in the stock markets and used as an investor benchmark.
The TOPIX sector indices are made of indices made by dividing the components of TOPIX into thirty-three categories. They are determined as per the industrial sectors that have been defined under the Securities Identification Code Committee. They comprise of but are not restricted to textiles, apparel, construction, machinery, non-ferrous metals, power, gas, transportation, air, banks, retail trade, pharmaceuticals, insurance, commodity futures, agriculture, iron, steel, forestry, and more.
There are sub-indices in TOPIX that have been published by the Stock Exchange. They include but are not restricted to the TOPIX New Index Series, the Stock Exchange Composite Index Series, The Tokyo Stock Exchange Mothers Index, and more.
Free Float Index
TOPIX is a free float index, and it has transitioned from a structure that these weighted companies are based on the whole collective figure of outstanding stocks to one system that weighs organizations on their total volume of shares available for trading in the market. This trend is called “free float,” and its transition started in 2005 and got completed during the summer of 2006.
Business expert Kavan Choksi states that one of the many indices at TOPIX is the TOPIX Core 30 Index, and the capitalization weighted Index observes the performance of thirty stocks on the Index with large market capitalizations with the most liquidity.
The Index began on April 1st, 1998, having a base value of one thousand. This list includes some of the famous companies in Japan, like Canon, Sony, Honda Motor, Mitsubishi Corp, and Toyota Motor.
