Bombay Stock Exchange (BSE)

BSE

The BSE has been active and in operation since 1875 and it is one of the lead Asian exchanges. Its head seat is in Mumbai, and it ranks as the 11th biggest exchange at a global level. A turnover of 1.43 trillion dollars was recorded last year in 2016. It also ranks high in terms of trade speed with an average of 6 microseconds. The list of companies which are proudly presented on its list is also very vast including 5500 companies in total.

India’s stock exchange differs from the US since its GDP does not rely on large corporations and accounts only for around 12% of the national GDP, whereas in the USA it is the main GDP driver standing at 70%. Stock trading is not the major economic backbone in India since it only accounts 4% of the country’s economy, and it includes both, the BSE and the National Stock Exchange of India (NSE). The BSE works five days a week and is closed on weekends and holidays.

Who Established the MSE?

The man who is accredited with the establishment of the MSE is often called the Cotton King or Big Bull. He was a great stockbroker and businessman in the 19th century and is called Premchand Roychand. He gathered five brokers to form the oldest stock exchange in India. First, the broker group had no premises and held their meetings at random locations. The number of brokers increased over time, so they would hold meetings at premises that had the capacity to accommodate larger numbers until they finally settled on Dalal Street.

The Bombay Stock Exchange (BSE) was not officially recognized by the Indian Government until the mid-1950's which is a long time. The BSE worked hard, and in 1986 they developed the SENEX Index which represented a tool for measuring the stock performance. It was the predecessor of the National Index which was introduced in 1989. The SENEX Index later served to enter derivatives trades in 2000. Future SENEX contracts became the “goods” to be sold. The result was a broader trading platform and an expanded market for the BSE.

The SENEX Index consists of 30 companies that are doing well and which are listed on the BSE. These 30 companies are some of the best known in India, and they operate in different sectors. The BSE calculates the shares by taking the company’s ready-for-trading float which represents one of the most efficient capitalization methods.

Indices

Besides SENEX, which represented a sort of breakthrough for the BSE, the stock exchange developed other indices, like for example the BSE-100 index in 2006 which is remodeled after its US counterpart. also, the BSE-200 was modeled after the DOLLEX-200. For all indices, they use the free float methods to get the most accurate results.

It is good that India looked up to its international peers when it comes to the stock exchange and used the USA index models to develop some on their own. The BSE maintains the indices by providing constant updates of their changes in value in real time. The stats can be found in the news, as well as on the BSE website.

There is also an Index Committee which sits down to review the indices on a regular basis. Their members are experts who draft the guidelines for index development and maintenance.

Awards and Recognition

The BSE has collected a nice award portfolio on their own throughout the years. Some of their latest awards include the InfoSec Maestros Awards 2016 and Lions CSR Precious Awards 2016. The ever-expanding exchange also received a series of awards for annual reports and accounts. To be more precise, it has been on a streak with this award since 2006.