The year 1999 may have marked an early sign that indexing, and the practice of buying to exploit a stock's inclusion in an important index, is becoming a factor in Japanese equity markets. A sudden buying surge hit many of the leading issues on the Japanese OTC market back on Thursday, July 1. Among them was Hikari Tsushin, a telephone subscription agency, that jumped a newsworthy 5.1%.
That was the day the Japan Securities Dealers Association (yes, it's called JASDAQ) introduced a series of three new indexes for the Japanese markets. "There are expectations that investment trust managers may set up fresh funds to focus on the new indexes, while institutional players are likely to raise their weighting of index components," explained a trader at Marusen Securities.