Dalal Street
The Stock Exchange at Bombay was established in 1875 as “The Native Share and Stockbrokers Association” which has evolved over the decades in to its present status as the premier Stock Exchange in India. It is one of the oldest in Asia having preceded even the Tokyo Stock Exchange which was founded in 1878. In the early days the business was conducted under the shade of a banyan tree in front of the town hall. The tree can still be seen in the Horniman Circle Park. In 1850 the Companies Act was passed and that heralded the commencement of the joint stock companies in India.
The American Civil War of 1860 helped Indians to establish brokerage houses in Bombay. The leading broker at the time, Premchand Roychand, assisted in framing conventions, ground rules and procedures for trading which are respected even now. He was the first Indian broker who could speak and write in fluent English. The exchange was established with 318 members with a fee of Re. 1/-. This fee has gradually increased over the years and today it is a over a crore.
In January 1899, the Brokers’ Hall was inaugurated by James M. MaClean, M.P. After the First World War the Bombay Stock Exchange (BSE) was housed in an old building near the Town Hall. In 1928, the present plot of land was acquired surrounded by Dalal Street, Bombay Samachar Marg, and Hammam Street.
A building was constructed in 1930 and occupied in December of that year.n 1995 the operations and dealings of the BSE were fully computerized and thus the famous out-cry system of share trading was replaced by screen based trading as in other modern stock exchanges around the world. Today Bombay is the financial and business capital of India. The BSE is housed in the 28-storied Phiroze Jeejeebhoy Towers in the same place where the old building once stood. Sir Phiroze Jamshedji Jeejeebhoy was the Chairman of the Exchange from 1966 till his death in 1980. The building has been named after him since its construction commenced during his Chairmanship and was completed just as he passed away.
In the fast growing Indian financial market, there are 23 stock exchanges trading securities. The National Stock Exchange of India (NSE) situated in Mumbai – is the largest and most advanced exchange with 1016 companies listed and 726 trading members.
NSE
The NSE is owned by the group of leading financial institutions such as Indian Bank or Life Insurance Corporation of India. However, in the totally de-mutualised Exchange, the ownership as well as the management does not have a right to trade on the Exchange. Only qualified traders can be involved in the securities trading.
The NSE is one of the few exchanges in the world trading all types of securities on a single platform, which is divided into three segments: Wholesale Debt Market (WDM), Capital Market (CM), and Futures & Options (F&O) Market. Each segment has experienced a significant growth throughout a few years of their launch. While the WDM segment has accumulated the annual growth of over 36% since its opening in 1994, the CM segment has increased by even 61% during the same period.
The National Stock Exchange of India has stringent requirements and criteria for the companies listed on the Exchange. Minimum capital requirements, project appraisal, and company’s track record are just a few of the criteria. In addition, listed companies pay variable listing fees based on their corporate capital size.
The National Stock Exchange of India Ltd. provides its clients with a single, fully electronic trading platform that is operated through a VSAT network. Unlike most world exchanges, the NSE uses the satellite communication system that connects traders from 345 Indian cities. The advanced technologies enable up to 6 million trades to be operated daily on the NSE trading platform.
National Stock Exchange of India Profile :
Address National Stock Exchange of India Ltd.
Exchange Plaza,
Plot no. C/1, G Block,
Bandra-Kurla Complex
Bandra (E)
Mumbai – 400 051
Telephone (022) 26598100 – 8114
Trading Hours 9.30 am – 4.30 pm.
Holidays Bakri Id (11 Jan), Republic Day (26 Jan), Moharram (9 Feb), Holi (15 Mar), Ram Navami (6 Apr), Mahavir Jayanti (11 Apr), Ambedkar Jayanti (14 Apr), Maharashtra Day (1 May), Independence Day (15 Aug), Gandhi Jayanti (2 Oct), Laxmi Puja (21 Oct), Bhaubeej (24 Oct), Ramzan Id (25 Oct), Christmas (25 Dec)
Securities Equities, bonds, CPs, CDs, warrants, mutual funds units, ETFs, derivatives.
Trading System Fully automated screen based trading platform NEAT
Key Staff S.B. Mathur – Chairman
Ravi Narain – Managing Director and CEO
History of the National Stock Exchange of India :
Capital market reforms in India and the launch of the Securities and Exchange Board of India (SEBI) accelerated the incorporation of the second Indian stock exchange called the National Stock Exchange (NSE) in 1992. After a few years of operations, the NSE has become the largest stock exchange in India.
Three segments of the NSE trading platform were established one after another. The Wholesale Debt Market (WDM) commenced operations in June 1994 and the Capital Market (CM) segment was opened at the end of 1994. Finally, the Futures and Options segment began operating in 2000. Today the NSE takes the 14th position in the top 40 futures exchanges in the world.
In 1996, the National Stock Exchange of India launched S&P CNX Nifty and CNX Junior Indices that make up 100 most liquid stocks in India. CNX Nifty is a diversified index of 50 stocks from 25 different economy sectors. The Indices are owned and managed by India Index Services and Products Ltd (IISL) that has a consulting and licensing agreement with Standard & Poor’s.
In 1998, the National Stock Exchange of India launched its web-site and was the first exchange in India that started trading stock on the Internet in 2000. The NSE has also proved its leadership in the Indian financial market by gaining many awards such as ‘Best IT Usage Award’ by Computer Society in India (in 1996 and 1997) and CHIP Web Award by CHIP magazine (1999).
Introduction SENSEX, first compiled in 1986, was calculated on a “Market Capitalization-Weighted” methodology of 30 component stocks representing large, well-established and financially sound companies across key sectors. The base year of SENSEX was taken as 1978-79. SENSEX today is widely reported in both domestic and international markets through print as well as electronic media. It is scientifically designed and is based on globally accepted construction and review methodology. Since September 1, 2003, SENSEX is being calculated on a free-float market capitalization methodology. The “free-float market capitalization-weighted” methodology is a widely followed index construction methodology on which majority of global equity indices are based; all major index providers like MSCI, FTSE, STOXX, S&P and Dow Jones use the free-float methodology. The growth of the equity market in India has been phenomenal in the present decade. Right from early nineties, the stock market witnessed heightened activity in terms of various bull and bear runs. In the late nineties, the Indian market witnessed a huge frenzy in the ‘TMT’ sectors. More recently, real estate caught the fancy of the investors. SENSEX has captured all these happenings in the most judicious manner. One can identify the booms and busts of the Indian equity market through SENSEX. As the oldest index in the country, it provides the time series data over a fairly long period of time (from 1979 onwards). Small wonder, the SENSEX has become one of the most prominent brands in the country. Index Specification: Base Year 1978-79 Base Index Value 100 Date of Launch 01-01-1986 Method of calculation Launched on full market capitalization method and effective September 01, 2003, calculation method shifted to free-float market capitalization. Number of scrips 30 Index Constituents list of constituents. Index calculation frequency. Real Time. Index calculation and Maintenance. Index Reach. Market Capitalization and Turnover Coverage. Historical Values of Index. Index, Price Earnings, Price to Book Value ratio and Dividend Yield %. Historical Notices. Historical Replacements.
SENSEX is calculated using the “Free-float Market Capitalization” methodology, wherein, the level of index at any point of time reflects the free-float 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. This market capitalization is further multiplied by the free-float factor to determine the free-float market capitalization. The base period of SENSEX is 1978-79 and the base value is 100 index points. This is often indicated by the notation 1978-79=100. The calculation of SENSEX involves dividing the free-float 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 adjustments arising out of corporate actions, replacement of scrips etc. During market hours, prices of the index scrips, at which latest trades are executed, are used by the trading system to calculate SENSEX on a continuous basis.
Concept
Major advantages of Free-float Methodology
Definition of Free-float
Determining Free-float Factors of Companies
Index Closure Algorithm
Maintenance of SENSEX
Wall street:
In March, 1792, twenty-four of New York City’s leading merchants met secretly at Corre’s Hotel to discuss ways to bring order to the securities business and to wrest it from their competitors, the auctioneers. Two months later, on May 17, 1792, these merchants signed a document named the Buttonwood Agreement, named after their traditional meeting place, a buttonwood tree. The agreement called for the signers to trade securities only among themselves, to set trading fees, and not to participate in other auctions of securities. These twenty-four men had founded what was to become the New York Stock Exchange. The Exchange would later be located at 11 Wall Street.
A century before, Dutch settlers had built a wall to protect themselves from Indians, priates, and other dangers. The path had become a bustling commercial thoroughfare because it joined the banks of the East River with those of the Hudson River on the west. The path was named Wall Street. Early merchants built their warehouses and shops on this path, along with a city hall and a church. New York was the U.S. national capitol from 1785 until 1790 and Federal Hall was built on Wall Street. George Washington was inaugurated on the steps of this building.
The first stock exchange in America was actually founded in Philadelphia in 1790. The New York merchant group, realizing that their stock exchange was now in decline after the early tumult of revolutionary war bonds and stock in the Bank of the United States, sent an observer to Philadelphia in early 1817. Upon his return, bearing news of the thriving Philadelphia exchange, the New York Stock and Exchange Board was formally organized on March 8, 1817.
The exchange rented a room at 40 Wall street and every morning the president, Anthony Stockholm, read the stocks to be traded. The exchange was an exclusive organization, new members were required to be voted in, and a candidate could be black-balled by three negative votes. In 1817 a seat on the exchange cost $25, in 1827 it increased to $100, and in 1848 the price was $400. Members wore top hats and swallowtail coats.
The early 1900s saw the rise of huge fortunes made on Wall Street. In 1901 J.P. Morgan astounded Wall Street by creating a billion dollar merger resulting in the U.S. Steel Corporation. In 1907 a wave of panic hit Wall Street. Eight hundred million dollars in securities were unloaded within a few months. Stock prices plummeted and runs on banks became a daily occurence. When the Knickerbocker Trust Company was forced to close its doors a panic swept banks throughout the country. Morgan pressured the leading New York bankers to forestall a total financial collapse of the country. They set up a single banking trust, with most large banks across the U.S. contributing to its financing. Morgan’s own group, as you might imagine, had controlling interest.
The first of the two largest Wall Street panics occurred in 1929. The Wall Street con game, already working full tilt, had convinced millions of Americans that the country was riding on an upward spiraling wave of financial glory. Both rich and poor put their money into stocks and bonds. The Wall Street myth, broadcast by the Insiders’ newspapers and magazines, spotlighted stories of shopkeepers and workers making fortunes in the stock market overnight.
Stock prices were pushed up beyond any relationship with the actual worth of the companies. In 1929 stock prices were 400% higher than they had been in 1924. The Insiders had made their fortunes and could no longer sustain the con, so on October 23, 1929, the market fell 31 points. Stock prices fell an additional 49 points on October 28 and on the 29th the entire market fell apart. Some brokers and investors jumped out of their office windows. The 1929 crash hit the U.S. even harder than the one that was to come in 1987. The fallout from the ’29 crash devastated the country, leading to a long-time economic collapse and depression that was to continue until the start of the Second World War in 1941.
The Wall Street crash of 1987 – “Black Monday” – occurred on October 19th. The Dow Jones fell an astounding 508 points, largest one-day loss in the stock market’s history. The Insiders running the con game landed on their feet and quickly misdirected the public’s attention, laying the blame on computerized (program) trading. Though the cascade of sell orders from large institutions had clogged the system, leaving many individual investors stranded while prices fell, the ’87 crash was created by the same Insider specialist group who control every facet of the stock market for their own profit.
As with so many elements of our American way of life, such as the federal and state governments, the stock market is an essential, positive ingredient in its essence, and has become deleterious only because certain rapacious people have taken control of it and twisted it to their purpose. The latest chapter in the Wall Street scam is the attempt by these same wealth-crazed people to try to convince American workers that they should put their retirement savings in the stock market. The pressure for this insanity is coming from the White House, Congress, the “Federal” Reserve, and anyone else for sale by these monetary rulers.