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Mumbai Sheyar Bāzār
Type Location Owner Key people Currency No. of listings MarketCap Volume Indexes Website
Stock Exchange Mumbai, India Bombay Stock Exchange Limited Rajnikant Patel (CEO) INR 4700 US$ 1.79 trillion (Dec 31, 2007) US$ 980 billion (2006) BSE Sensex www.bseindia.com
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. 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. The Bombay Stock Exchange was established in 1875. Around 6,000 Indian companies list on the stock exchange, 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.
Singapore Exchange (SGX) made a strategic investment in Bombay Stock Exchange, acquiring 5% of its shares for US$42.7 million. It is consistent with the strategy of building an Asian Gateway for securities and derivatives. BSE is also considering to take part of the capitalisation of the rising ascension of its partner, Singapore Exchange, which is becoming a leading financial hub in Asia-Pacific. BSE also claims a strategic partnership with Deutsche Borse
Hours of Operation
Beginning of the Day Session....8:00 - 9:00 Login Session....9:00 - 9:30 Trading Session....9:30 - 15:30 Position Transfer Session....15:30 - 15:50 Closing Session....15:50 - 16:05 Option Exercise Session....16:05 - 16:35 Margin Session....16:35 - 16:50 Query Session....16:50 - 17:35 End of Day Session....17:35 Note :- BSE's normal trading sessions are on all days of the week except Saturdays, Sundays and holidays declared by the Exchange in advance.
The BSE SENSEX (also known as the BSE 30 index) is a value-weighted index composed of thirty scrips, with the base April 1979 = 100. The set of companies which make up the index has been changed only a few times in the last twenty years. These companies account for around onefifth of the market capitalization of the BSE. Apart from BSE SENSEX, which is the most popular stock index in India, BSE uses other stock indices as well:
BSE 500 BSE PSU BSE BANKEX BSE Pharma BSE Consumer Durables
BSE 100 BSE MIDCAP BSE Teck
BSE 200 BSE SMLCAP BSE Auto
BSE Fast Moving Consumer Goods (FMCG) BSE Metal
National Stock Exchange (NSE):National Stock Exchange Limited or S&P CNX NIFTY
Type Stock Exchange Location Mumbai, India Owner Key people Currency No. of listings MarketCap Indexes Website National Stock Exchange of India Limited Mr. Ravi Narain Managing Director INR 1587 US$ 1.46 trillion (2006) S&P CNX Nifty CNX Nifty Junior S&P CNX 500 www.nse-india.com
Introduction:The National Stock Exchange of India Limited or S&P CNX NIFTY (NSE), is a Mumbai-based stock exchange. It is the largest stock exchange in India in terms of daily turnover and number of trades, for both equities and derivative trading.. Though a number of other exchanges exist, NSE and the Bombay Stock Exchange are the two most significant stock exchanges in India, and between them are responsible for the vast majority of share transactions. The NSE's key index is the S&P CNX Nifty, known as the Nifty, an index of fifty major stocks weighted by market capitalisation. 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. As of 2006, the NSE VSAT terminals, 2799 in total, cover more than 1500 cities across India . 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.It is the second fastest growing stock exchange in the world with a recorded growth of 16.6%.
NSE building at BKC
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.
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. 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 CNBCTV18, a
Currently, NSE has the following major segments of the capital market:
• • • • •
Equity Futures and Options Retail Debt Market Wholesale Debt Market Currency futures
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.
NSE also set up as index services firm known as India Index Services & Products Limited (IISL) and has launched several stock indices, including:
• • • • •
S&P CNX Nifty CNX Nifty Junior CNX 100 (= S&P CNX Nifty + CNX Nifty Junior) S&P CNX 500 (= CNX 100 + 400 major players across 72 industries) CNX Midcap (introduced on 18 July 2005 replacing CNX Midcap 200)
About Nifty 50:The S&P CNX Nifty ( Nifty 50 or simply Nifty) is a composite of the top 50 stocks listed on the National Stock Exchange (NSE), representing 24 different sectors of the economy. It is a simplified tool that helps investors and ordinary people alike, to understand what is happening in the stock market and by extension, the economy. If the Nifty Index performs well, it is a signal that companies in India are performing well and consequently that the country is doing well. 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).
Ownership and Management
Nifty was developed by the economists Ajay Shah and Susan Thomas, then at IGIDR. Later on, it came to be owned and managed by India Index Services and Products Ltd. (IISL), which is a joint venture between NSE and CRISIL. IISL is India's first specialized company focused upon the index as a core product. IISL have a consulting and licensing agreement with Standard & Poor's ( who are world leaders in index services. 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
Criteria for inclusion of Stock in Nifty50
• • •
Average market capitalization of Rs.5,000 million or more during the last six months. Liquidity: Cost of transaction (impact cost) of less than 0.75% for more than 90% of trades, over six months. At least 12% floating stock (not held by promoters of the company or their associates).
About Sensex :Q.1 What is SENSEX?
The SENSEX, short form of the BSE-Sensitive Index, is a "Market CapitalizationWeighted" index of 30 stocks representing a sample of large, well-established and financially sound companies. It is the oldest index in India and has acquired a unique place in the collective consciousness of investors. The index is widely used to measure the performance of the Indian stock markets. SENSEX is considered to be the pulse of the Indian stock markets as it represents the underlying universe of listed stocks at The Stock Exchange, Mumbai. Further, as the oldest index of the Indian Stock market, it provides time series data over a fairly long period of time (since 1978-79).
Q.2 What are the objectives of SENSEX?
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: To measure market movements Given its long history and its wide acceptance, no other index matches the SENSEX in reflecting market movements and sentiments. SENSEX is widely used to describe the mood in the Indian Stock markets. Benchmark for funds performance The inclusion of blue chip companies and the wide and balanced industry representation in the SENSEX makes it the ideal benchmark for fund managers to compare the performance of their funds. For index based derivative products Institutional investors, money managers and small investors all refer to the SENSEX for their specific purposes The SENSEX is in effect the proxy for the Indian stock markets. The country's first derivative product i.e. Index-Futures was launched on SENSEX.
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.
Q.4 How is SENSEX calculated?
SENSEX is calculated using a "Market Capitalization-Weighted" methodology. As per this methodology, the level of index at any point of time reflects the total market value of 30 component stocks relative to a base period. (The market capitalization of a company is determined by multiplying the price of its stock by the number of shares issued by the company). An index of a set of a combined variables (such as price and number of shares) is commonly referred as a 'Composite Index' by statisticians. A single indexed number is used to represent the results of this calculation in order to make the value easier to work with and track over time. It is much easier to graph a chart based on indexed values than one based on actual values. 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 calculation of SENSEX involves dividing the total market capitalization of 30
companies in the Index by a number called the Index Divisor. The Divisor is the only link to the original base period value of the SENSEX. It keeps the Index comparable over time and is the adjustment point for all Index maintenance adjustments. During market hours, prices of the index scrips, at which latest trades are executed, are used by the trading system to calculate SENSEX every 15 seconds and disseminated in real time.
Q.5 How is the closing Index calculated?
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.
What is a Repo Rate?
Whenever the banks have any shortage of funds they can borrow it from RBI. Repo rate is the rate at which our banks borrow rupees from RBI. A reduction in the repo rate will help banks to get money at a cheaper rate. When the repo rate increases borrowing from RBI becomes more expensive
CRR Rate in India
Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with RBI. If RBI decides to increase the percent of this, the available amount with the banks comes down. RBI is using this method (increase of CRR rate), to drain out the excessive money from the banks.
What is SLR Rate?
SLR (Statutory Liquidity Ratio) is the amount a commercial bank needs to maintain in the form of cash, or gold or govt. approved securities (Bonds) before providing credit to its customers. SLR rate is determined and maintained by the RBI (Reserve Bank of India) in order to control the expansion of bank credit.
Primary market trends:-
A primary trend has broad support throughout the entire market or market sector and lasts for a year or more.
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.
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."
Most Popular Stock Exchanges Of The World:-
Ahmedabad Bangalore Bhubaneshwar Mumbai Kolkata Kochi Coimbatore New Delhi Guwahati Hyderabad Kolkata Jaipur Mangalore Ludhiana Indore Chennai Meerut Mumbai Mumbai Pune Rajkot Kanpur
Founded 1894 1963 1956 1875 1830 1989 1998 1947 1983 1943 1989 1983 1920 1956 1992 1990 1982 1989 1982 1990
Listings Short name 2000 ASE 600 BgSE
Ahmedabad Stock Exchange Bangalore Stock Exchange Bhubaneshwar Stock Exchange Bombay Stock Exchange Calcutta Stock Exchange Cochin Stock Exchange Coimbatore Stock Exchange Delhi Stock Exchange Association Guwahati Stock Exchange Hyderabad Stock Exchange Inter-connected Stock Exchange of India Jaipur Stock Exchange Kanara Stock Exchange Ludhiana Stock Exchange Association Madhya Pradesh Stock Exchange Madras Stock Exchange Meerut Stock Exchange National Stock Exchange of India OTC Exchange of India Pune Stock Exchange Saurashtra Kutch Stock Exchange Uttar Pradesh Stock Association Vadodara Stock Exchange
CSE CSE CSX
1500 MSE 1398 NSE
OTCEI PSE SKSE
Nepal Stock Exchange Kathmandu
Islamabad Stock Exchange Karachi Stock Exchange Lahore Stock Exchange Sialkot Stock Exchange Islamabad Karachi Lahore Sialkot
1989 1947 1970 2005
ISE KSE LSE LSE
Colombo Stock Exchange Colombo
Bangladesh Dhaka Stock Exchange
AFRICAN STOCK EXCHNGES
Ghana Stock Exchange* Accra Nairobi
28 GSE 48 NSE
Nairobi Stock Exchange*
Nigerian Stock Exchange* Lagos
AltX Bond Exchange of South Africa JSE Securities Exchange* The South African Futures Exchange Johannesburg Johannesburg Johannesburg Johannesburg
2003 1989 1887 1990
51 ALTX ~400 BESA 472 JSE
Zimbabwe Stock Exchange* Harare
list of American stock exchanges
Canada's New Stock Exchange Montréal Exchange Toronto Montréal CNQ
American Stock Exchange Boston Stock Exchange Chicago Stock Exchange HedgeStreet National Stock Exchange New York Board of Trade New York Stock Exchange NYSE Arca Philadelphia Stock Exchange Nasdaq Canada New York City Boston Chicago San Mateo Chicago New York City New York City New York City Philadelphia New York City AMEX
1834 1882 1885 1998 1817 2006 1790 2000
BSE CHX HedgeStreet NSX NYBOT NYSE NYSE Arca PHLX Nasdaq Canada
Toronto Stock Exchange TSX Venture Exchange
Bovespa Rio de Janeiro Stock Exchange Brazilian Mercantile and Futures Exchange Bolsa de Cereais e Mercardorias de Maringá São Paulo Rio de Janeiro São Paulo
1895 1971 1982
Bovespa BVRJ BM&F BCMM
list of European stock exchanges.
Euronext OMX Paris Stockholm Euronext OMX
Berliner Börse Börsen Hamburg und Hannover Börse München Deutsche Börse Group Eurex Frankfurt Stock Exchange Berlin Hannover München Frankfurt Frankfurt Frankfurt
Börse Berlin BÖAG Börse München Deutsche Börse Group EUREX FWB
Copenhagen Stock Exchange Copenhagen
OMX Nordic Market
Borsa Italiana Milano
Bucharest Stock Exchange Rasdaq Sibiu Stock Exchange Bucharest Bucharest Sibiu
1882 1996 1997
BVB Rasdaq BMFMS
Moscow Interbank Currency Exchange Russian Trading System Moscow Moscow
Saint Petersburg Stock Exchange
Euronext Amsterdam Euronext Amsterdam
Bolsa de Valores de Barcelona Bolsa de Valores de Bilbao Madrid Stock Exchange Mercado Oficial Español de Futuros y Opciones Bolsa de Valores de Valencia Barcelona Bilbao Madrid Madrid Valencia Bolsa de Barcelona Bolsa de Bilbao Bolsa de Madrid MEFF Bolsa de Valencia
Nordic Growth Market Stockholm Stock Exchange Stockholm Stockholm
NGM OMX Nordic Market
Swiss Exchange Bern eXchange Zurich Bern
1850 1888 18661984
Istanbul Stock Exchange Istanbul ISE
London Stock Exchange Eastern Caribbean Securities Exchange Bahamas International Securities Exchange Barbados Stock Exchange Bermuda Stock Exchange London Basseterre
list of stock exchanges of Southwest Asia and the Greater Middle East.
Iranian Oil Bourse Tehran Stock Exchange Tehran Tehran
Iraq Stock Exchange Baghdad
Amman Stock Exchange Amman ASE
Libyan Stock Exchange* Benghazi
United Arab Emirates
Abu Dhabi Securities Market Dubai Financial Market Dubai International Financial Exchange Abu Dhabi Dubai Dubai ADSM DFM DIFX
The role of stock exchanges:Raising capital for businesses Mobilizing savings for investment Facilitating company growth Redistribution of wealth Corporate governance Creating investment opportunities for small investors Government capital-raising for development projects Barometer of the economy
Major stock exchanges:Twenty Major Stock Exchanges In The World: Market Capitalization & Year-to-date Turnover at the end of October 2007 Market Value (trillions of US dollars) Total Share Turnover (trillions of US dollars) $0.349 $12.4 $0.476 $1.36 $28.7 $1.003 $0.263 $1.70 $1.66 $0.564 $3.56 $1.86 $5.45 $3.64 $9.14 $2.49 $1.98 $0.4882 $1.60 $1.58
Region Africa Americas Americas Americas Americas/Europe Asia-Pacific South Asia Asia-Pacific Asia-Pacific South Asia Asia-Pacific Asia-Pacific Asia-Pacific Europe Europe Europe Europe Europe Europe Europe
JSE Securities Exchange $0.940 NASDAQ $4.39 São Paulo Stock Exchange $1.40 Toronto Stock Exchange $2.29 NYSE Euronext $20.7 Australian Securities Exchange $1.453 Bombay Stock Exchange $1.61 Hong Kong Stock Exchange $2.97 Korea Exchange $1.26 National Stock Exchange of India $1.46 Shanghai Stock Exchange $3.02 Shenzhen Stock Exchange $0.741 Tokyo Stock Exchange $4.63 Frankfurt Stock Exchange $2.12 (Deutsche Börse) London Stock Exchange $4.21 Madrid Stock Exchange (Bolsas y $1.83 Mercados Españoles) Milan Stock Exchange (Borsa $1.13 Italiana) Moscow Interbank Currency $0.9652 Exchange (MICEX) Nordic Stock Exchange Group $1.38 OMX1 Swiss Exchange $1.33
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