The Nikkei 225 Stock Average, the benchmark measure for Japanese equities, is being twisted by a single company more than at any time in the last 12 years.
Fast Retailing Co. (9983), Asia’s biggest apparel retailer, was responsible for almost a sixth of the gauge’s 49 percent advance in the last two years, according to data compiled by Bloomberg. At 10 percent of the Nikkei 225, the clothier has almost twice the combined influence of Toyota Motor Corp., Mitsubishi UFJ (8306) Financial Group Inc, Honda Motor Co., Japan Tobacco Inc. and NTT DoCoMo Inc., Japan’s five biggest companies by market value.
The skew in the Nikkei 225 caused by a single company underscores the difference between stock averages, where ranking is determined by a share price, and most indexes, where market capitalization is key. The 62-year-old equity benchmark, owned by Nikkei Inc., is the most common benchmark for pricing derivatives on the country’s $4.39 trillion equity market. Open interest for June Nikkei 225 futures stood at more than $96 billion on April 26, according to data compiled by Bloomberg.
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