10 Interesting Facts About Bombay Stock Exchange.

Interesting Facts About Bombay Stock Exchange

Established in 1875, BSE [formerly Known as Bombay Stock Exchange Limited ], Is Asia’s First& World’s Fastest Stock Exchange with a speed of 6 microseconds and one of India’s leading exchange groups. Over the past 140 years, BSE has facilitated the growth of the Indian corporate sector by providing it an efficient capital-raising platform.

BSE is a corporatized and demutualized entity, with abroad shareholder-base which includes two leading Global exchanges, Deutsche Boerse and Singapore Exchange as Strategic Partners.BSE provides an efficient and transparent market for trading in equity, currency, debt instruments derivatives, mutual fund.it also has a platform for trading in equities of small and medium enterprises [SME].  

Bombay Stock Exchange Profile

AddressJeejeebhoy Towers,
Dadal Street, Mumbai 400001
Telephone91-22-227221233/4
websitehttp://www.bseindia.com
Trading HoursMonday-Friday 9.55 am-3.30 pm IST
HolidaysBakri-id, Republic Day, Good Friday, Ramzan, Independence Day, Ganesh Chaturthi, Diwali
SecuritiesStocks, bonds, derivatives
Trading SystemElectronic
Key StuffChairman – Jagdish Cpoor. CEO- Rajnikant Patel

Bombay Stock Exchange History

  • The Bombay Stock Exchange is the oldest exchange in Asia and this is the first among the 22Stock  Exchanges recognized by the Government of India under the securities contracts(Regulation) Act, 1956.
  • It was the first one to be recognized and it is the only one that had the privilege of getting permanent recognition. On August 31, 1957, the BSE became the first stock exchange to be recognized by the Indian government under the Securities Contracts Regulation Act.
  • The idea of the stockexchange was born during British rule when the British formed the British EastIndia Company and did business with India.
  • Stock trading started verysoon, so the need for a market where stocks can be bought and sold can be felt.Therefore, 5 Indian brokers came together and started trading under the BanyanTree and thus Indian market started.
  • In 1875, 25 equity brokers came together to create “The Native Shares and Stock BrokersAssociation” and officially started trading in the stock market. To make this association, 25 Shares Brokers collected a contribution of 1 rupee.
  • In 1980,the exchange moved to the Phiroze Jeejeebhoy Towers at Dalal Street.

Interesting Facts about BSE.

  • There are 23 stock exchanges in the india. Bombay Stock Exchange is the largest, withover 6000 stock listed. The BSE account for over two thirds of the total volumein the country.
  • It is the 11th largeststock exchange that completes the transaction in 25 microseconds and Marketcapatalization with 1.8$ trillion as on 25th feb 2015.
  • The BSE accounts for over 2/3 of the total trading volume in country.  Bombay Stock Exchange founded by Premchand Roychand.
  • All major company from different types of industry like Automobile, Chemicals, Cement, Tires, Trading, Textiles, Bank, Education, cable, Electronics are listed In Bombay Stock Exchange.
  • In 1986, it developed the BSE SENSEX index, giving the BSE a means to measure the overall performance of the exchange. Its turnover is 1/3 of the total turnover insecurities in india.

About SENSEX Index.

  • SENSEX was introduce by BSE on January 1st 1986
  • The SENSEXis as indicator of all the major companies of the BSE.
  • Stockmarket performance is the quantified by calculating an index using the benchmark scrip’s and as know to all SENSEX (Sensitive Index) is associatedwith BOMBAY STOCK EXCHANGE.

Calculation of SENSEX
The method that is used to calculate Sensex is float market capitalization
method.

Formula to Calculate SENSEX

FREE FLOT MARKET CAPITAL
—————————————— * 100
BASE MARKET CAPITAL

Today’s Current Scenario of BSE

BSE SENSEX 20 YEARS CHART
BSE SENSEX 20 Years Daily Chart

Bombay Stock Exchange Facts and Figures

  • In 2009, the average volume of business conducted on the BSE was
    approximately $40 billion each month.
  • The number of shares traded each month on the BSE is in the range of
    40-50 million.
  • The total market capitalization for the companies traded on the BSE is
    in the are of $1.1 trillion. ALL OF THE ABOVE DOLLOR VALUES ARE STATED IN usd.
  • 1ST in India to introduced Equity Derivatives.
  • 1st in India to launch a Free Float Index.
  • 1st in India to launch US$ version of BSE Sensex.
  • 1st in India to launch Exchange Enabled Internet Trading Platform.
  • 1st in India to obtain ISO certification for Surveillance,
    Clearing & Settlement.
  • 1st to have an exclusive facility for financial training.

Structure of Bombay Stock Exchange.

  • A Board of 9 directors
  • Executive Directors
  • 3 Gov Nominees
  • An RBI Nominees
  • 5 Public representatives.

NOTE: Executive Director is responsible for the day-2-days functioning and administration of stock exchange.

Scandals on the Bombay Stock Exchange.

1991-19921994-19951997
Harshad Mehta and Hiten DALAL.1. Collusion of broker and top-management for the purpose of price rigging
M.S. Shoes Ltd.
Rupangi Impex Ltd.
Magan Industries Ltd.
1.C.R Bhansali Group
Fraudulent Accounting Practices
NBFC
Ready Forward Deals2. Fraudulent Shares
Sesa Goa Ltd.
 
Banking Receipts3. Harshad Mehta
Collusion of broker and top-management for the purpose of price rigging
BPL, Videocon, Sterlite.
Involvement of BSE Officials.
Lifetime Ban.
 
Manipulation4. T+5 System Rolling Settlement System. 
Sebi Act on April 4th 19925. BLESS 
NSE Established in November 1992  
Badla discountinued in 1993  

Reform at BSE and Post Reform

  • January 2000: rolling settlement system(T+5 system)
  • Started with 10 scripts and Later 153 were brought under.
  • January 2001: Bless was introduced
  • July 2001: badla was wholly replaced by rolling settlement system
  • January 2001: all the shares in BSE were brought under this scheme

BSE Post Reform

  • Badla and BLESS were banned.
  • Short selling banned from march 2001 to july 2001
  • 20% circuit filter for stocks in rolling settlement
  • Index based filter(10%, 15%, 20%)
  • Introduction of margin trading in September 2001

NSE Better Than BSE?

  • Yes NSE has Superior technology as compared to BSE.
  • More transparent marketplace.
  • NSE is a corporate body.
  • Promotes the growth of human capital.
  • An innovative approach to trading
  • Regular inspection and investigation.
  • Proper risk management system(PRISM and SPAN).
  • The telecommunication network is subjected to periodic checkup.

BSE VS NSE Comparison.

BSENSE
Number of companies5096+2000+
Market Capitalization1,00,00,000 croresUS$ 1.47 trillion
Main IndexBSE SenxexS&P CNX Nifty
Claim to fameAsia’s OldestIndia’s Biggest
Websitewww.bseindia.comwww.nseindia.com
Established Year18751992
Ranks10th in the world15th in the world
IndexesBSE SENSEX, BSE SMALL CAP,
BSE MID CAP.
BSE500
CNX Nifty
CNX Nifty Junior
CNX 500

Major Activities and BSE Milestones.

DATEBSE MileStone
11-Feb-2014Launch of institutional Trading Platform on BSE SMS
28-Jan-2014Launch of Interest Rate Futures(BSE-IRF)
28-Nov-2013Launch of currency Derivatives(BSE-CDX)
19-Feb-2013BSE enters into Statergic Partnership with S&P Dow Jones Indices
30-Mar-2012BSE Launched trading in BRICSMART indices derivatives.
30-Mar-2012Launch of BSE-SME Exchange Platform
22-Feb-2012Launch of S&P BSE-GREENEX to promote investments in Green India.
15-Jan-2011Co-Location facility at BSE – Tie up with Netmagic.
7-Jan-2011BSE Training Ltd with IGNOU launches India’s first 2 years fulltime MBA program specializing in Financial Market.
11-Nov-2011Maharastra and United Kingdom Ministers launched Concept Note for S&P BSE Carbon Index.

Major Attack on BSE.

  • On Friday 12 March a powerful car bomb exploded in the basement of the Bombay Stock Exchange Building.
  • Damages were?
    • 28 story building.
    • About 45 were killed by this explosion.
    • All the offices were damaged.

Listed Companies in BSE Sensex Index.

Name of the companyIndustry Name
Adani Ports and Special Economic Zone Ltd.Port
Asian Paints Ltd.Paints
Axis Bank Ltd.Bank – Private
Bajaj Auto Ltd.Automobile Two & Three Wheelers
Bharti Airtel Ltd.Telecommunication – Service Provider
Coal India Ltd.Mining & Minerals
HDFC Bank Ltd.Bank – Private
Hero MotoCorp Ltd.Automobile Two & Three Wheelers
Hindustan Unilever Ltd.Household & Personal Products
Housing Development Finance Corporation Ltd.Finance – Housing
ICICI Bank Ltd.Bank – Private
IndusInd Bank Ltd.Bank – Private
Infosys Ltd.IT – Software
ITC Ltd.Cigarettes/Tobacco
Kotak Mahindra Bank Ltd.Bank – Private
Larsen & Toubro Ltd.Engineering – Construction
Mahindra & Mahindra Ltd.Automobiles – Passenger
Maruti Suzuki India Ltd.Automobiles – Passenger Cars
NTPC Ltd.Power Generation/Distribution
Oil & Natural Gas Corporation Ltd.Oil Exploration
Power Grid Corporation Of India Ltd.Power Generation/Distribution
Reliance Industries Ltd.Refineries
State Bank Of IndiaBank – Public
Sun Pharmaceutical Industries Ltd.Pharmaceuticals & Drugs
Tata Consultancy Services Ltd.IT – Software
Tata Motors – DVR OrdinaryAutomobiles-Trucks/Lcv
Tata Motors Ltd.Automobiles-Trucks/Lcv
Tata Steel Ltd.Steel & Iron Products
Vedanta Ltd.Metal – Non Ferrous
Wipro Ltd.IT – Software
Yes Bank Ltd.Bank – Private
BSE Overall Rating
  • Speed & Excecution
  • Turnover
  • Support to Broker
  • website Usability
4.6

Summary

Bombay Stock Exchange is the oldest stock exchange in Asia’s and Almost 50 percent Of BSE’S cash market turnover comes from stocks that are outside the “A” group OF STOCKS, NSE’s top 100 stocks alone account for nearly 80 percent of its cash segments turnover

Pros

  • Fair Price for the Securities
  • Better Corporate Practice.
  • Listing fees are lower as compared to NSE.
  • About 5092 listed Companies
  • Little Formality.

Cons

  • low Turnover as compare to NSE.
  • lower volume.
  • lower liquidity.
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