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Sony rejoins the JPX-Nikkei Index 400

Sony Corp. is returning to the JPX-Nikkei Index 400 after a three-year absence.

Japan Exchange Group Inc. and Nikkei Inc., which manage the index, are bringing the Japanese consumer electronics group and 30 other issues back into the Japanese stock index. The new selections will become effective Aug. 31. Sony's inclusion in the index comes shortly after the company posted a surge in first-quarter net profit on Aug. 1.

Japan Exchange, which runs the Tokyo Stock Exchange and the Osaka Securities Exchange, and newspaper publisher Nikkei conduct an annual review of the 400 index constituents. They base their decisions on a combination of quantitative and qualitative factors. For example, they exclude companies that have had liabilities exceeding assets during any of the past three fiscal years or have recorded an operating deficit in all of the past three fiscal years. Return on equity and operating profit also come into consideration.

Other new entries to the index this year include game developer Konami Holdings Corp. and whisky maker Suntory Beverage & Food Ltd. Meanwhile, 28 companies left the index, including camera maker Fujifilm Holdings Corp. and beverage maker Ito En Ltd.

Sony left the index in August 2014, just over a year after Japan Exchange and Nikkei launched the JPX-Nikkei 400. The index aims to attract domestic and global investors to Japanese corporations and generate interest in the Japanese stock market. The maker of smartphones and televisions booked net losses for two consecutive years in the fiscal years ending March 2014 and March 2015 as it discontinued its personal computers business and registered weakness in its mobile communication operations.

Constituents that are eligible for the JPX-Nikkei Index 400 are common stocks traded in the TSE 1st section, 2nd section, Mothers or JASDAQ.