The bombay stock exchange


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The bombay stock exchange

  1. 1. The Bombay Stock Exchange (BSE) (Marathi: Bombay Śhare Bāzaār)(formerly, The Stock Exchange, Bombay) is a stock exchange located on Dalal Street, Mumbaiand is the oldest stock exchange in Asia. The equity market capitalization of the companies listedon the BSE was US$1.63 trillion as of December 2010, making it the 4th largest stock exchangein Asia and the 8th largest in the world.[1] The BSE has the largest number of listed companies inthe world.[2]As of June 2011, there are over 5,085 listed Indian companies and over 8,196 scrips on the stockexchange,[3] the Bombay Stock Exchange has a significant trading volume. The BSE SENSEX,also called "BSE 30", is a widely used market index in India and Asia. Though many otherexchanges exist, BSE and the National Stock Exchange of India account for the majority of theequity trading in India. While both have similar total market capitalization (about USD 1.6trillion), share volume in NSE is typically two times that of BSE.Contents[hide] 1 Hours of operation 2 History 3 Timeline 4 Indices 5 Awards 6 See also 7 References 8 External links[edit] Hours of operation Session TimingBeginning of the Day Session 8:30 - 9:00pre-open trading session 9:00 - 9:15Trading Session 9:15 - 15:30Position Transfer Session 15:30 - 15:50Closing Session 15:50 - 16:05Option Exercise Session 16:05 -The hours of operation for the BSE quoted above are stated in terms the local time (i.e. GMT+5:30) in Mumbai , India. BSEs normal trading sessions are on all days of the week exceptSaturday, Sundays and holidays declared by the Exchange in advance.[4]
  2. 2. [edit] HistoryThe Phiroze Jeejeebhoy Towers house the Bombay Stock Exchange since 1980.The Bombay Stock Exchange is the oldest exchange in Asia. It traces its history to the 1850s,when four Gujarati and one Parsi stockbroker would gather under banyan trees in front ofMumbais Town Hall. The location of these meetings changed many times, as the number ofbrokers constantly increased. The group eventually moved to Dalal Street in 1874 and in 1875became an official organization known as The Native Share & Stock Brokers Association. In1956, the BSE became the first stock exchange to be recognized by the Indian Government underthe Securities Contracts Regulation Act. The Bombay Stock Exchange developed the BSESENSEX in 1986, giving the BSE a means to measure overall performance of the exchange. In2000 the BSE used this index to open its derivatives market, trading SENSEX futures contracts.The development of SENSEX options along with equity derivatives followed in 2001 and 2002,expanding the BSEs trading platform. Historically an open outcry floor trading exchange, theBombay Stock Exchange switched to an electronic trading system in 1995. It took the exchangeonly fifty days to make this transition. This automated, screen-based trading platform called BSEOn-line trading (BOLT) currently has a capacity of 8 million orders per day. The BSE has alsointroduced the worlds first centralized exchange-based internet trading system, enable investors anywhere in the world to trade on the BSE platform.[5] The BSE is currentlyhoused in Phiroze Jeejeebhoy Towers at Dalal Street, Fort area.[edit] TimelineFollowing is the timeline on the rise of the SENSEX through Indian stock market history.1830s Business on corporate stocks and shares in Bank and Cotton presses started in Mumbai.1860-1865 Cotton price bubble as a result of the American Civil War.1870 - 90s Sharp increase in share prices of jute industries followed by a boom in tea stocks andcoal1978-79 Base year of SENSEX, defined to be 100.
  3. 3. 1986 SENSEX first compiled[6] using a market Capitalization-Weighted methodology for 30component stocks representing well-established companies across key sectors.30 October 2006 The SENSEX on October 30, 2006 crossed the magical figure of 13,000 andclosed at 13,024.26 points, up 117.45 points or 0.9%. It took 135 days for the SENSEX to movefrom 12,000 to 13,000 and 123 days to move from 12,500 to 13,000.5 December 2006 The SENSEX on December 5, 2006 crossed the 14,000-mark to touch 14,028points. It took 36 days for the SENSEX to move from 13,000 to the 14,000 mark.6 July 2007 The SENSEX on July 6, 2007 crossed the magical figure of 15,000 to touch 15,005points in afternoon trade. It took seven months for the SENSEX to move from 14,000 to 15,000points.19 September 2007 The SENSEX scaled yet another milestone during early morning trade onSeptember 19, 2007. Within minutes after trading began, the SENSEX crossed 16,000, rising by450 points from the previous close. The 30-share Bombay Stock Exchanges sensitive index took53 days to reach 16,000 from 15,000. Nifty also touched a new high at 4659, up 113 points.The SENSEX finally ended with a gain of 654 points at 16,323. The NSE Nifty gained 186points to close at 4,732.26 September 2007 The SENSEX scaled yet another height during early morning trade onSeptember 26, 2007. Within minutes after trading began, the SENSEX crossed the 17,000-mark.Some profit taking towards the end saw the index slip into red to 16,887 - down 187 points fromthe days high. The SENSEX ended with a gain of 22 points at 16,921.9 October 2007 The BSE SENSEX crossed the 18,000-mark on October 9, 2007. It took just 8days to cross 18,000 points from the 17,000 mark. The index zoomed to a new all-time intra-dayhigh of 18,327. It finally gained 789 points to close at an all-time high of 18,280. The market setseveral new records including the biggest single day gain of 789 points at close, as well as thelargest intra-day gains of 993 points in absolute term backed by frenzied buying after the news ofthe UPA and Left meeting on October 22 put an end to the worries of an impending election.15 October 2007 The SENSEX crossed the 19,000-mark backed by revival of funds-basedbuying in blue chip stocks in metal, capital goods and refinery sectors. The index gained the last1,000 points in just four trading days. The index touched a fresh all-time intra-day high of19,096, and finally ended with a smart gain of 640 points at 19,059.The Nifty gained 242 pointsto close at 5,670.29 October 2007 The SENSEX crossed the 20,000 mark on the back of aggressive buying byfunds ahead of the US Federal Reserve meeting. The index took only 10 trading days to gain1,000 points after the index crossed the 19,000-mark on October 15. The major drivers of todaysrally were index heavyweights Larsen and Toubro, Reliance Industries, ICICI Bank, HDFCBank and SBI among others. The 30-share index spurted in the last five minutes of trade to fly-past the crucial level and scaled a new intra-day peak at 20,024.87 points before ending at its
  4. 4. fresh closing high of 19,977.67, a gain of 734.50 points. The NSE Nifty rose to a record high5,922.50 points before ending at 5,905.90, showing a hefty gain of 203.60 points.8 January 2008 The SENSEX peaks. It crossed the 21,000 mark in intra-day trading after 49trading sessions. This was backed by high market confidence of increased FII investment andstrong corporate results for the third quarter. However, it later fell back due to profit booking.13 June 2008 The SENSEX closed below 15,200 mark, Indian market suffer with majordownfall from January 21, 200825 June 2008 The SENSEX touched an intra day low of 13,731 during the early trades, thenpulled back and ended up at 14,220 amidst a negative sentiment generated on the Reserve Bankof India hiking CRR by 50 bps. FII outflow continued in this week.2 July 2008 The SENSEX hit an intra day low of 12,822.70 on July 2, 2008. This is the lowestthat it has ever been in the past year. Six months ago, on January 10, 2008, the market had hit anall time high of 21206.70. This is a bad time for the Indian markets, although Reliance andInfosys continue to lead the way with mostly positive results.6 October 2008 The SENSEX closed at 11801.70 hitting the lowest in the past 2 years.10 October 2008 The SENSEX today closed at 10527, 800.51 points down from the previousday having seen an intraday fall of as large as 1063 points. Thus, this week turned out to be theweek with largest percentage fall in the SENSEX18 May 2009 After the result of 15th Indian general election SENSEX gained 2100.79 pointsfrom the previous close of 12173.42, a record one-day gain. In the opening trade itself theSENSEX evinced a 15% gain over the previous close which led to a two-hour suspension intrading. After trading resumed, the SENSEX surged again, leading to a full day suspension oftrading.19 October 2010 BSE introduced the 15-minute special pre-open trading session, a mechanismunder which investors can bid for stocks before the market opens. The mechanism, known aspre-open session call auction, lasted for 15 minutes (from 9:00-9:15 am).[7]5 November 2010 BSE SENSEX crossed the 21000 mark (exactly 21004.96).27 December 2010 BSE SENSEX is at 20,028.93.[edit] IndicesThe graph of SENSEX from July 1997 to March 2011The launch of SENSEX in 1986 was later followed up in January 1989 by introduction of BSENational Index (Base: 1983-84 = 100). It comprised 100 stocks listed at five major stock
  5. 5. exchanges in India - Mumbai, Calcutta, Delhi, Ahmedabad and Madras. The BSE National Indexwas renamed BSE-100 Index from October 14, 1996 and since then, it is being calculated takinginto consideration only the prices of stocks listed at BSE. BSE launched the dollar-linked versionof BSE-100 index on May 22, 2006. BSE launched two new index series on 27 May 1994: TheBSE-200 and the DOLLEX-200. BSE-500 Index and 5 sectoral indices were launched in 1999.In 2001, BSE launched BSE-PSU Index, DOLLEX-30 and the countrys first free-float basedindex - the BSE TECk Index. Over the years, BSE shifted all its indices to the free-floatmethodology (except BSE-PSU index). BSE disseminates information on the Price-EarningsRatio, the Price to Book Value Ratio and the Dividend Yield Percentage on day-to-day basis ofall its major indices. The values of all BSE indices are updated on real time basis during markethours and displayed through the BOLT system, BSE website and news wire agencies. All BSEIndices are reviewed periodically by the BSE Index Committee. This Committee whichcomprises eminent independent finance professionals frames the broad policy guidelines for thedevelopment and maintenance of all BSE indices. The BSE Index Cell carries out the day-to-daymaintenance of all indices and conducts research on development of new indices.[8]SENSEX is significantly correlated with the stock indices of other emerging markets[9][10][edit] Awards The World Council of Corporate Governance has awarded the Golden Peacock Global CSR Award for BSEs initiatives in Corporate Social Responsibility (CSR). The Annual Reports and Accounts of BSE for the year ended March 31, 2006 and March 31, 2007 have been awarded the ICAI awards for excellence in financial reporting. The Human Resource Management at BSE has won the Asia - Pacific HRM awards for its efforts in employer branding through talent management at work, health management at work and excellence in HR through technology
  6. 6. India Financial marketis one of the oldest in the world and is considered to be the fastest growing and best among all the markets of theemerging economies. The history of Indian capital markets dates back 200 years toward the end of the 18th century when India was underthe rule of the East India Company. The development of the capital market in India concentrated around Mumbaiwhere no less than 200 to 250 securities brokers were active during the second half of the 19th century.Thefinancial market in Indiatoday is more developed than many other sectors because it was organized long before with the securitiesexchanges of Mumbai, Ahmedabad and Kolkata were established as early as the 19th century.By the early 1960s the total number of securities exchanges in India rose to eight, including Mumbai, Ahmedabadand Kolkata apart from Madras, Kanpur, Delhi, Bangalore and Pune. Today there are 21 regional securitiesexchanges in India in addition to the centralized NSE (National Stock Exchange) and OTCEI (Over the CounterExchange of India).However the stock markets in India remained stagnant due to stringent controls on the market economy that allowedonly a handful of monopolies to dominate their respective sectors. The corporate sector wasnt allowed into manyindustry segments, which were dominated by the state controlled public sector resulting in stagnation of the economyright up to the early 1990s. Thereafter when the Indian economy began liberalizing and the controls began to bedismantled or eased out, the securities markets witnessed a flurry of IPOs that were launched. This resulted in manynew companies across different industry segments to come up with newer products and services.A remarkable feature of the growth of the Indian economy in recent years has been the role played by its securitiesmarkets in assisting and fuelling that growth with money rose within the economy. This was in marked contrast to theinitial phase of growth in many of the fast growing economies of East Asia that witnessed huge doses of FDI (ForeignDirect Investment) spurring growth in their initial days of market decontrol. During this phase in India much of theorganized sector has been affected by high growth as the financial markets played an all-inclusive role in sustainingfinancial resource mobilization. Many PSUs (Public Sector Undertakings) that decided to offload part of their equitywere also helped by the well-organized securities market in India.The launch of the NSE (National Stock Exchange) and the OTCEI (Over the Counter Exchange of India) during themid 1990s by the government of India was meant to usher in an easier and more transparent form of trading insecurities. The NSE was conceived as the market for trading in the securities of companies from the large-scalesector and the OTCEI for those from the small-scale sector. While the NSE has not just done well to grow and evolveinto the virtual backbone of capital markets in India the OTCEI struggled and is yet to show any sign of growth anddevelopment. The integration of IT into the capital market infrastructure has been particularly smooth in India due tothe countrys world class IT industry. This has pushed up the operational efficiency of the Indian stock market toglobal standards and as a result the country has been able to capitalize on its high growth and attract foreign capitallike never before.The regulating authority for capital markets in India is the SEBI (Securities and Exchange Board of India). SEBI cameinto prominence in the 1990s after the capital markets experienced some turbulence. It had to take drastic measuresto plug many loopholes that were exploited by certain market forces to advance their vested interests. After this initialphase of struggle SEBI has grown in strength as the regulator of Indias capital markets and as one of the countrysmost important institutions.