One of the busiest and world’s largest exchanges in the world, The Bombay Stock Exchange (BSE), also known as the Stock Exchange Mumbai, currently ranks number four in terms of annual transactions in the world. The exchange was established in the year 1875 as the Native Share & Stock Brokers’ Association and gained permanent recognition in 1956 under the Securities Contracts (Regulation) Act. The exchange is a home to about 5,092 listed companies, with a total market capitalization of around Rs 59 trillion or nearly $1.3 trillion (USD) as of September 2011. It is located at Dalal Street, Mumbai, India. The BSE has a vision to emerge as the premier Indian stock exchange by establishing global benchmarks. It has nation presence in around 417 cities and towns in India. The exchange has been providing the investor an efficient market to trade in debt instruments, derivatives and in equity.
Benchmarks
The BSE Index ‘Sensex’ is India’s first and popular stock market benchmark index. The Exchange Traded Funds (ETF) on SENSEX, are listed on BSE and in Hong Kong. The futures and options on the index are also traded at BSE. The Sensex has recently rallied over more than 1 year and at September 30, 2009 stood above the psychological 17,000 mark for the first time since May 2008, three months before the collapse of Lehman Brothers. The index rose 78% in the first three quarters of calendar 2009 as foreign funds had invested almost $12 billion in India’s capital markets by then. Other stock indices of BSE are BSE 500, BSEPSU, BSEMIDCAP, BSESMLCAP and BSEBANKEX.
Key people associated with BSE
Bombay Stock Exchange is managed professionally under the direction of its board of directors that is made of distinguished personalities from commerce & industries and headed by the Managing Director and CEO. Madhu Kannan is the current CEO of the BSE since his appointment in the spring of 2009. The board formulates all strategies and maintains overall control on the functioning of the exchange.
New ventures
On July 14, 2010, The Bombay Stock Exchange and Eurexhad officially announced that they would be launching options and futures on the BSE’s blue-chip SENSEX on Eurex starting Oct 4, 2010. BSE made another announcement in November 2009 stating it would offer single stock futures and options. It also declared that it would begin trading an index that tracks the value of initial public offerings on the exchange for 2 years after the shares’ first BSE listing if they meet minimum standards of free-float market capitalization. The new BSE IPO Index will cap each component’s weight of the index at 20% and the index must contain a minimum of 8 IPO shares.
BSE- The pioneer
The Bombay Stock Exchange has been a pioneer in various areas mentioned below:
1. BSE was the first to introduce equity derivatives in India.
2. BSE was the first one to receive ISO certification for a stock exchange in India.
3. The exchange was first to launch a free float index, US$ version of BSE, exchange enabled Internet trading platform in India.
4. The exchange has been ranked number one in India in the financial services sector to launch its website in Gujarati and Hindi.
5. BSE On-Line Trading System (BOLT) has been awarded the globally recognized the Information Security Management standard BS7799-2:2002.
6. BSE has been at advantage of having an exclusive facility for financial training.
BSE Figures & Facts
Following are some of the facts and figures indicating how the volume of trading occurs on the Bombay Stock Exchange:
1. This year, the average volume of business conducted on the BSE was approximately $15 billion USD each month.
2. The total market capitalization for the 5,100 companies traded on the exchange is in the area of $1.4 trillion.
3. The number of shares traded each month on the BSE is in the range of 30 to 35 billion.
BSE at zenith
In the history of India’s security market, the expedition of Bombay Stock Exchange is interesting. As India’s largest bourse, in terms of market capitalization and listed companies, the exchange has played a diversified role in developing the Indian securities market. The exchange has set certain best practices adopted by 23 stock exchanges which were established after India achieved its independence. Today, BSE is the world’s number 1 exchange in the world in terms of the number of listed companies over 4,900. The exchange has its ranking in the top 10 of global exchanges in terms of listed companies and market capitalization.
By Artika Shah
