(Bloomberg) -- The index compiler of Japan’s Nikkei 225 Stock Average is expected to announce its periodic review as early as Monday, with analysts forecasting the blue-chip gauge will add Muji chain operator Ryohin Keikaku Co. and remove Nippon Paper Industries Co.
Ryohin Keikaku will likely be added because the Nikkei lacks consumer names, while Nippon Paper will probably be dropped on a lack of liquidity, according to SMBC Nikko Securities Inc., Daiwa Securities Co. and Mizuho Securities Co.
The semi-annual reshuffle and weighting changes may create about ¥100 billion ($683 million) in overall buying demand, said Daiwa’s quantitative analyst Junichi Hashimoto, who also forecasts Rohm Co. to be added and Hitachi Zosen Corp. to be removed.
SMBC Nikko analysts including Hayato Yoshida expect Nomura Research Institute Ltd. and Pan Pacific International Holdings Corp. to join the gauge. DIC Corp. and Mitsubishi Logistics Corp. may be dropped, he said.
“Three stocks will likely be chosen from consumption companies, which is the only sector lacking” in the Nikkei, said Yoshida. “The results will become a touchstone for the number of stocks to be replaced from next spring.”
Mizuho Securities also expects Nomura Research Institute and Pan Pacific to be added. DIC and GS Yuasa Corp. may be removed, he said.
Nikkei Inc. announces its periodic review twice a year, and does not notify in advance the date of the release. Last year, changes were made public on Monday, Sept. 4, after the market close.
Fast Retailing Co. will likely see some selling after the Nikkei announced it would set a capping ratio that would reduce the company’s weighting to the 9% range from around 10.45% at the end of July, SMBC’s Yoshida wrote in a note.
Shares may move on the Nikkei’s decision, as passive funds that track the gauge will need to adjust positions to reflect the changes.
--With assistance from Eijiro Ueno.
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