Professional Documents
Culture Documents
Introduction of BSE :-
The Bombay Stock Exchange Limited (Hindi: मुंबई शेयर बाजार Mumbaī Śeyar Bājār) (formerly, The
Stock Exchange, Mumbai; popularly called The Bombay Stock Exchange, or BSE) is the oldest stock
exchange in Asia and has the greatest number of listed companies in world, with 4700 listed as of August
2007.[1] It is located at Dalal Street, Mumbai, India. On 31 December 2007, the equity market capitalization
of the companies listed on the BSE was US$ 1.79 trillion, making it the largest stock exchange in South
Asia and the tenth largest in the world.[2]
The Bombay Stock Exchange was established in 1875. Around 6,000 Indian companies list on the stock
exchange,[3] and it has a significant trading volume. The BSE SENSEX (SENSitive indEX), also called the
"BSE 30", is a widely used market index in India and Asia. Though many other exchanges exist, BSE and
the National Stock Exchange of India account for most of the trading in shares in India.
Alliances
Singapore Exchange (SGX) made a strategic investment in Bombay Stock Exchange, acquiring
5% of its shares for US$42.7 million. It is consistent with the strategy of building an Asian
Gateway for securities and derivatives. BSE is also considering to take part of the capitalisation
of the rising ascension of its partner, Singapore Exchange, which is becoming a leading financial
hub in Asia-Pacific.
Hours of Operation
Beginning of the Day Session....8:00 - 9:00
Login Session....9:00 - 9:30
Trading Session....9:30 - 15:30
Position Transfer Session....15:30 - 15:50
Closing Session....15:50 - 16:05
Option Exercise Session....16:05 - 16:35
Margin Session....16:35 - 16:50
Query Session....16:50 - 17:35
End of Day Session....17:35
Note :- BSE's normal trading sessions are on all days of the week except Saturdays,
Sundays and holidays declared by the Exchange in advance.[4]
BSE indices
The BSE SENSEX (also known as the BSE 30 index) is a value-weighted index composed of
thirty scrips, with the base April 1979 = 100. The set of companies which make up the index has
been changed only a few times in the last twenty years. These companies account for around one-
fifth of the market capitalization of the BSE.
Apart from BSE SENSEX, which is the most popular stock index in India, BSE uses other stock
indices as well:
NSE is mutually-owned by a set of leading financial institutions, banks, insurance companies and
other financial intermediaries in India but its ownership and management operate as separate
entities[2]. As of 2006, the NSE VSAT terminals, 2799 in total, cover more than 1500 cities across
India [3]. In October 2007, the equity market capitalization of the companies listed on the NSE
was US$ 1.46 trillion, making it the second largest stock exchange in South Asia. NSE is the
third largest Stock Exchange in the world in terms of the number of trades in equities.[4]It is the
second fastest growing stock exchange in the world with a recorded growth of 16.6%.[5]
Origins
The National Stock Exchange of India was promoted by leading Financial institutions at the
behest of the Government of India, and was incorporated in November 1992 as a tax-paying
company. In April 1993, it was recognized as a stock exchange under the Securities Contracts
(Regulation) Act, 1956. NSE commenced operations in the Wholesale Debt Market (WDM)
segment in June 1994. The Capital Market (Equities) segment of the NSE commenced operations
in November 1994, while operations in the Derivatives segment commenced in June 2000.
Innovations
NSE has remained in the forefront of modernization of India's capital and financial markets, and
its pioneering efforts include:
• Being the first national, anonymous, electronic limit order book (LOB) exchange to trade
securities in India. Since the success of the NSE, existent market and new market
structures have followed the "NSE" model.
• Setting up the first clearing corporation "National Securities Clearing Corporation Ltd."
in India. NSCCL was a landmark in providing innovation on all spot equity market (and
later, derivatives market) trades in India.
• Co-promoting and setting up of National Securities Depository Limited, first depository
in India[2].
• Setting up of S&P CNX Nifty.
• NSE pioneered commencement of Internet Trading in February 2000, which led to the
wide popularization of the NSE in the broker community.
• Being the first exchange that, in 1996, proposed exchange traded derivatives, particularly
on an equity index, in India. After four years of policy and regulatory debate and
formulation, the NSE was permitted to start trading equity derivatives
• Being the first and the only exchange to trade GOLD ETFs (exchange traded funds) in
India.
• NSE has also launched the NSE-CNBC-TV18 media centre in association with CNBC-
TV18, a
Markets
Currently, NSE has the following major segments of the capital market:
• Equity
• Futures and Options
• Retail Debt Market
• Wholesale Debt Market
• Currency futures
Hours
NSE's normal trading sessions are from 09:55am to 03:30pm on all
days of the week except Saturdays, Sundays and holidays declared by
the Exchange in advance.[6]
Indices
NSE also set up as index services firm known as India Index Services & Products Limited (IISL)
and has launched several stock indices, including:
An upbeat economy is usually reflected in a strong performance of the Nifty Index. A rising
index is also indicative that the investors are gung-ho about the future. The Nifty Index is based
upon solid economic research. It is internationally respected and recognized as a pioneering effort
in providing simpler understanding of stock market complexities.
Nifty is the flagship index of NSE, the 3rd largest stock exchange in the world in terms of number
of transactions (Stock Futures).
CNX stands for CRISIL NSE Indices. CNX ensures common branding of indices, to reflect the
identities of both the promoters, i.e. NSE and CRISIL. Thus, 'C' stands for CRISIL, 'N' stands for
NSE and X stands for Exchange or Index. The S&P prefix belongs to the US-based Standard &
Poor's Financial Information Services.
It is calculated as a weighted average, so changes in the share price of larger companies have
more effect. The base is defined as 1000 at the price level of November 3, 1995
The SENSEX is the benchmark index of the Indian Capital Markets with wide
acceptance among individual investors, institutional investors, foreign investors and
fund managers. The objectives of the index are:
Q.3 What are the criteria for selection and review of scrips for the
SENSEX?
A. Quantitative Criteria:
1. Market Capitalization:
The scrip should figure in the top 100 companies listed by market capitalization.
Also market capitalization of each scrip should be more than 0.5 % of the total
market capitalization of the Index i.e. the minimum weight should be 0.5 %.
Since the SENSEX is a market capitalization weighted index, this is one of the
primary criteria for scrip selection. (Market Capitalization would be averaged for
last six months)
2. Liquidity:
(i) Trading Frequency: The scrip should have been traded on each and every
trading day for the last one year. Exceptions can be made for extreme reasons
like scrip suspension etc. (ii) Number of Trades: Number of Trades: The scrip
should be among the top 150 companies listed by average number of trades per
day for the last one year. (iii) Value of Shares Traded: Value of Shares Traded:
The scrip should be among the top 150 companies listed by average value of
shares traded per day for the last one year.
3. Continuity:
Whenever the composition of the index is changed, the continuity of historical
series of index values is re-established by correlating the value of the revised
index to the old index (index before revision). The back calculation over the last
one-year period is carried out and correlation of the revised index to the old
index should not be less than 0.98. This ensures that the historical continuity of
the index is maintained.
4. Industry Representation:
Scrip selection would take into account a balanced representation of the listed
companies in the universe of BSE. The index companies should be leaders in their
industry group.
5. Listed History:
The scrip should have a listing history of at least one year on BSE.
B. Qualitative Criteria:
Track Record:
In the opinion of the Index Committee, the company should have an acceptable
track record.
The base period of SENSEX is 1978-79. The actual total market value of the
stocks in the Index during the base period has been set equal to an indexed
value of 100. This is often indicated by the notation 1978-79=100. The formula
used to calculate the Index is fairly straightforward. However, the calculation of
the adjustments to the Index (commonly called Index maintenance) is more
complex.
The closing SENSEX is computed taking the weighted average of all the trades on
SENSEX constituents in the last 15 minutes of trading session. If a SENSEX
constituent has not traded in the last 15 minutes, the last traded price is taken
for computation of the Index closure. If a SENSEX constituent has not traded at
all in a day, then its last day's closing price is taken for computation of Index
closure. The use of Index Closure Algorithm prevents any intentional
manipulation of the closing index value.
Bull market
A bull market tends to be associated with increasing investor confidence, motivating
investors to buy in anticipation of future price increases and future capital gains. In
describing financial market behavior, the largest group of market participants is often
referred to, metaphorically, as a herd. This is especially relevant to participants in bull
markets since bulls are herding animals. A bull market is also sometimes described as a
bull run. Dow Theory attempts to describe the character of these market movements.
India's BSE Index SENSEX was in a bull run for almost one year from January 2007 to
January 2008 as it increased from 14,000 points to 21,000 points. Another notable and
recent bull market was in the 1990s when the U.S. and many other global financial
markets rose rapidly.
Bear market
A bear market is described as being accompanied by widespread pessimism. Investors
anticipating further losses are often motivated to sell, with negative sentiment feeding on
itself in a vicious circle. The most famous bear market in history was preceded by the
Wall Street Crash of 1929 and lasted from 1930 to 1932, marking the start of the Great
Depression. A milder, low-level, long-term bear market occurred from about 1973 to
1982, encompassing the stagflation of U.S. economy, the 1970s energy crisis, and the
high unemployment of the early 1980s.
Prices fluctuate constantly on the open market; a bear market is not a simple decline, but
a substantial drop in the prices of the majority of stocks in a given market over a defined
period of time. According to The Vanguard Group, "While there’s no agreed-upon
definition of a bear market, one generally accepted measure is a price decline of 20% or
more over at least a two-month period."[4]
Most Popular Stock Exchanges Of The World:-
Nepal
Nepal Stock Exchange Kathmandu 1993 125 NEPSE
Pakistan
Islamabad Stock Exchange Islamabad 1989 ISE
Karachi Stock Exchange Karachi 1947 KSE
Lahore Stock Exchange Lahore 1970 LSE
Sialkot Stock Exchange Sialkot 2005 LSE
Sri Lanka
Colombo Stock Exchange Colombo 1896 243 CSE
Bangladesh
Dhaka Stock Exchange Dhaka 1954 DSE
Nigeria
Nigerian Stock Exchange* Lagos 1960 223 NSE[1]
South Africa
AltX Johannesburg 2003 51 ALTX
Bond Exchange of South Africa Johannesburg 1989 ~400 BESA
JSE Securities Exchange* Johannesburg 1887 472 JSE
The South African Futures Exchange Johannesburg 1990 SAFEX
Zimbabwe
Zimbabwe Stock Exchange* Harare 1993 ZSE
United States
American Stock Exchange New York City AMEX
Boston Stock Exchange Boston 1834 BSE
Chicago Stock Exchange Chicago 1882 CHX
HedgeStreet San Mateo HedgeStreet
National Stock Exchange Chicago 1885 NSX
New York Board of Trade New York City 1998 NYBOT
New York Stock Exchange New York City 1817 NYSE
NYSE Arca New York City 2006 NYSE Arca
Philadelphia Stock Exchange Philadelphia 1790 PHLX
Nasdaq
Nasdaq Canada New York City 2000 Canada
Toronto Stock Exchange Toronto 1861 TSX
TSX Venture Exchange Toronto 2001 TSX
Brazil
Bovespa São Paulo 1895 Bovespa
Rio de Janeiro Stock Exchange Rio de Janeiro BVRJ
Brazilian Mercantile and Futures
Exchange São Paulo 1971 BM&F
Bolsa de Cereais e Mercardorias de
Maringá 1982 BCMM
Germany
Berliner Börse Berlin 1685 Börse Berlin
Börsen Hamburg und Hannover Hannover BÖAG
Börse
Börse München München 1830 München
Deutsche
Börse
Deutsche Börse Group Frankfurt Group
Eurex Frankfurt 1998 EUREX
Frankfurt Stock Exchange Frankfurt FWB
Denmark
OMX Nordic
Copenhagen Stock Exchange Copenhagen 2003 Market
Italy
Borsa Italiana Milano 1997 BIt
Romania
Bucharest Stock Exchange Bucharest 1882 BVB
Rasdaq Bucharest 1996 Rasdaq
Sibiu Stock Exchange Sibiu 1997 BMFMS
Russia
Moscow Interbank Currency Exchange Moscow 1992 MICEX
Russian Trading System Moscow 1995 RTS
Saint Petersburg Stock Exchange Saint Petersburg SPBEX
Netherlands
Euronext
Euronext Amsterdam Amsterdam
Spain
Bolsa de
Bolsa de Valores de Barcelona Barcelona Barcelona
Bolsa de
Bolsa de Valores de Bilbao Bilbao Bilbao
Bolsa de
Madrid Stock Exchange Madrid 1831 Madrid
Mercado Oficial Español de Futuros y
Opciones Madrid 1989 MEFF
Bolsa de
Bolsa de Valores de Valencia Valencia Valencia
Sweden
Nordic Growth Market Stockholm 2003 NGM
OMX Nordic
Stockholm Stock Exchange Stockholm 1863 Market
Switzerland
Swiss Exchange Zurich 1850 SWX
Bern eXchange Bern 1888 BX
Turkey
1866-
Istanbul Stock Exchange Istanbul 1984 ISE
United Kingdom
London Stock Exchange London 1801 2800 LSE
Eastern Caribbean Securities Exchange Basseterre ECSE
Bahamas International Securities
Exchange BISX
Barbados Stock Exchange Bridgetown BSE
Bermuda Stock Exchange 1871 BSX
list of stock exchanges of Southwest Asia and the Greater Middle East.
Iran
Propose
Iranian Oil Bourse Tehran d IOB
Tehran Stock Exchange Tehran TSE
Iraq
Iraq Stock Exchange Baghdad 2004 ISX
Jordan
Amman Stock Exchange Amman ASE
Libya
Libyan Stock Exchange* Benghazi
Redistribution of wealth
Corporate governance
Total Share
Market Value
Turnover
Region Stock Exchange (trillions of US
(trillions of US
dollars)
dollars)
Africa JSE Securities Exchange $0.940 $0.349
Americas NASDAQ $4.39 $12.4
Americas São Paulo Stock Exchange $1.40 $0.476
Americas Toronto Stock Exchange $2.29 $1.36
Americas/Europe NYSE Euronext $20.7 $28.7
Asia-Pacific Australian Securities Exchange $1.453 $1.003
South Asia Bombay Stock Exchange $1.61 $0.263
Asia-Pacific Hong Kong Stock Exchange $2.97 $1.70
Asia-Pacific Korea Exchange $1.26 $1.66
South Asia National Stock Exchange of India $1.46 $0.564
Asia-Pacific Shanghai Stock Exchange $3.02 $3.56
Asia-Pacific Shenzhen Stock Exchange $0.741 $1.86
Asia-Pacific Tokyo Stock Exchange $4.63 $5.45
Frankfurt Stock Exchange
Europe $2.12 $3.64
(Deutsche Börse)
Europe London Stock Exchange $4.21 $9.14
Madrid Stock Exchange (Bolsas y
Europe $1.83 $2.49
Mercados Españoles)
Milan Stock Exchange (Borsa
Europe $1.13 $1.98
Italiana)
Moscow Interbank Currency
Europe $0.9652 $0.4882
Exchange (MICEX)
Nordic Stock Exchange Group
Europe $1.38 $1.60
OMX1
Europe Swiss Exchange $1.33 $1.58