Seeking Alpha

Nintendo falls after not making Nikkei 225

  • Nintendo (NTDOY.PK -5%) shares fell after the company was passed over for inclusion into the Nikkei 225. Nintendo would have been the fourth-largest component of the index.
  • BNP Paribas' Takao Suzuki: "We believe Nintendo’s shares have been overvalued due to speculative demand, on the assumption that they would be included in the Nikkei ... As this expectation has come to nothing, this appears to be the right time to sell."
  • Mizuho and Nomura analysts both warned that this may be the way the cards unfold for Nintendo back in July.
Comments (5)
  • Philip Marlowe
    , contributor
    Comments (1014) | Send Message
     
    Any reason why they were passed over?
    9 Sep 2013, 01:37 PM Reply Like
  • gdimitrov
    , contributor
    Comments (11) | Send Message
     
    "The inclusion of highly priced stocks will impact other companies on the measure and even the Nikkei 225 (NKY) Stock Average as a whole,” wrote Nomura’s Izumi. “This may be what keeps it off the benchmark." (http://bloom.bg/15MjRZT)

     

    Nintendo's stock has been run roughshod in the past several years and experienced abnormal volatility, which can be perceived as a negative for the Nikkei. Nintendo would have been the fourth-largest component and materially affected the index.
    9 Sep 2013, 01:55 PM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1014) | Send Message
     
    So if I understand correctly, the Nikkei 225 is like the Dow Jones in that it is not market cap weighed.
    9 Sep 2013, 02:04 PM Reply Like
  • gdimitrov
    , contributor
    Comments (11) | Send Message
     
    Yes. it is price-weighted.
    9 Sep 2013, 02:07 PM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1014) | Send Message
     
    Thanks for the explanation.
    9 Sep 2013, 06:25 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector

Next headline on your portfolio:

|