The Growth of Derivatives Market in India
Firstly I am briefing the current Indian market and comparing it with it past. I am alsogiving brief data about foreign market. Then at the last I am giving my suggestions andrecommendations.With over 25 million shareholders, India has the third largest investor base in the worldafter USA and Japan. Over 7500 companies are listed on the Indian Stock Exchanges(more than the number of companies listed in developed markets of Japan, UK,Germany, France, Australia, Switzerland, Canada and Hong Kong.). The Indian CapitalMarket is significant in terms of the degree of development, volume of trading,transparency and its tremendous growth potential.India’s Market Capitalization was the highest among the emerging markets. Totalmarket capitalization of The Bombay Stock Exchange (BSE), which, as on July 31,1997, was US$ 175 billion has grown by 37.5% percent every twelve months and wasover US$ 834 billion as of January, 2007. Bombay Stock Exchanges (BSE), one of theoldest in the world, accounts for the largest number of listed companies transacting their shares on a nationwide Online Trading System. The two major exchanges namely theNational Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) ranked no. 3 &5 in the world, calculated by the number of daily transactions done on the exchanges.The Total Turnover of Indian Financial Markets crossed US$ 2256 billion in 2006 – Anincrease of 82% from US $ 1237 billion in 2004 in a short span of 2 years only. Turnover in the Spot and Derivatives segment both in NSE & BSE was higher by 45% into 2006as compared to 2005. With daily average volume of US $ 9.4 billion, the Sensex hasposted excellent returns in the recent years.
Currently the Market Capitalisation of the Sensex as on July 4th, 2009 was Rs 48.4 Lakh Crore with a P/E of more than20.