Bombay Stock Exchange

Mumbai Sheyar Bāzār

Type Stock Exchange

Location Mumbai, India
Owner Bombay Stock Exchange Limited
Key people Rajnikant Patel (CEO)
Currency INR
No. of listings 4700
MarketCap US$ 1.79 trillion (Dec 31, 2007)
Volume US$ 980 billion (2006)
Indexes BSE Sensex
Website 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.[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.

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.[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:

BSE 500 BSE 100 BSE 200

BSE PSU BSE MIDCAP BSE SMLCAP

BSE BANKEX BSE Teck BSE Auto

BSE Pharma BSE Fast Moving Consumer Goods (FMCG)

BSE Consumer Durables BSE Metal

National Stock Exchange (NSE):-

National Stock Exchange Limited or S&P

CNX NIFTY

Type Stock Exchange

Location Mumbai, India

National Stock Exchange of India

Owner
Limited
Key people Mr. Ravi Narain Managing Director
Currency INR
No. of listings 1587
MarketCap US$ 1.46 trillion (2006)
S&P CNX Nifty
Indexes CNX Nifty Junior
S&P CNX 500
Website 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.[1]. 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[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

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.

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:

• 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 Capitalization-

Weighted" 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.

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:-

Exchange Location Founded Listings Short name

India
Ahmedabad Stock Exchange Ahmedabad 1894 2000 ASE
Bangalore Stock Exchange Bangalore 1963 600 BgSE
Bhubaneshwar Stock Exchange Bhubaneshwar 1956 BhSE
Bombay Stock Exchange Mumbai 1875 4909 BSE
Calcutta Stock Exchange Kolkata 1830 CSE
Cochin Stock Exchange Kochi 1989 CSE
Coimbatore Stock Exchange Coimbatore 1998 CSX
Delhi Stock Exchange Association New Delhi 1947 3000 DSE
Guwahati Stock Exchange Guwahati 1983 GSE
Hyderabad Stock Exchange Hyderabad 1943 900 HSE
Inter-connected Stock Exchange of India Kolkata ISE
Jaipur Stock Exchange Jaipur 1989 750 JSE
Kanara Stock Exchange Mangalore
Ludhiana Stock Exchange Association Ludhiana 1983 LSE
Madhya Pradesh Stock Exchange Indore MPSE
Madras Stock Exchange Chennai 1920 1500 MSE
Meerut Stock Exchange Meerut 1956
National Stock Exchange of India Mumbai 1992 1398 NSE
OTC Exchange of India Mumbai 1990 OTCEI
Pune Stock Exchange Pune 1982 PSE
Saurashtra Kutch Stock Exchange Rajkot 1989 SKSE
Uttar Pradesh Stock Association Kanpur 1982 850 UPSE

Vadodara Stock Exchange Vadodara/Baroda 1990 VSE

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

AFRICAN STOCK EXCHNGES

Ghana
Ghana Stock Exchange* Accra 1990 28 GSE
Kenya
Nairobi Stock Exchange* Nairobi 1954 48 NSE

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

list of American stock exchanges

Canada
Canada's New Stock Exchange Toronto CNQ
Montréal Exchange Montréal 1872 MX

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

list of European stock exchanges.

Europe
Euronext Paris Euronext
OMX Stockholm OMX

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

United Arab Emirates

Abu Dhabi Securities Market Abu Dhabi ADSM
Dubai Financial Market Dubai DFM
Dubai International Financial Exchange Dubai 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

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