Bombay Stock Exchange  

The Bombay Stock Exchange is the oldest stock exchange in the entire Asia, and has the third largest of all the listed companies in the world. At the last recorded count on February 2010, it was observed that 4900 companies were listed in the exchange. On the same month, the equity market capitalization of the companies listed was totaled to US $1.28 trillion, making it the biggest stock exchange in South Asia and the 12the largest in the globe.

The hours of operation in BSE is such that the day begins at 8.00 am, the trading session starts from 9am to 3.30pm. The closing session is between 3. 50 pm and 4.05 pm, the query session is between 4.50 pm and 5.35 pm, and finally, the .end of day. session is at 5.30 pm. Normal trading sessions happen every day with the exception of Saturday and Sunday.

The trading volume in Bombay Stock Exchange is huge considering the number of companies that are listed. The CEO and MD of BSE is Madhu Kannan, who is a former managing director of the corporate strategy group of Bank of America-Merrill Lynch. The BSE Sensex(value weighted index comprising of 30 largest and most actively traded stocks) is aptly called, BSE 30. This is the most widely used market index in Asia. Together with National Stock Exchange of India, the BSE do most trading of shares in India.

The Bombay Stock Exchange was founded in 1875 by five people who were stockbrokers by profession-4 Gujratis and 1 Parsi. They would usually trade nearby the Mumbai.s Town hall under the sprawling banyan trees, in those times. As the number of stock brokers grew, the group move to Dalal Street in 1874 and a year later, they formed a professional organization called the 'The Native Share & Stock Brokers Association'. In 1875, 318 persons paid an erstwhile high price of Re. 1, to become members of what is now known as Bombay Stock Exchange Limited (BSE).

The Government of India recognized it as the first stock exchange under the Securities Contracts Regulation Act in 1956. The Bombay Stock Exchange created the BSE Sensex in 1986, which made it the best indicator to judge the overall performance of the exchange. In 2000, BSE made use of this index to initiate the derivatives market, futures contracts which expanded the BSE.s trading reach. The shouting and outcry that was the nature of floor trade exchange gave way to an electronic trading system in the year 1995.Now what is seen is a huge automated, screen-based trading base called BOLT(BSE Online Trading) that can take 80 lakh orders daily. The BSE has also started BSEWEBx.co.in; the world.s first centralized exchange based online trading system that can enable investors to trade on the BSE platform from any part of the world.

BSE Indices:

  1. BSE National Index (Base: 1983-84 = 100): Started in 1989, it consisted of 100 stocks listed at 5 main stock exchanges in India: Mumbai, Delhi, Calcutta, Madras and Ahmadabad. BSE National Index was later renamed as BSE-100 Index in October 14, 1996 and since then, only the prices of stocks listed at BSE are being taken into consideration for computing BSE National Index. The dollar linked version of BSE-100 index came into existence on May 22, 2006.

  2. To give broad based representation to listed companies and attract new industry sectors and large market capitalization, BSE launched on May 24, 1994 two indices: BSE-200 and Dollex 200.

  3. To attract segment specialized and sector oriented indices, BSE has evolved into a range of indices like BSE-500 index and five sectoral indices in 1999.

  4. In 2001, BSE initiated BSE-PSU Index called Dollex-30 and the first free-float based index called BSE TECk Index. Free-float based index was born because market experts felt that it was not right to calculate total market capitalization of a scrip for index calculation because most of the outstanding capital of a company was with the promoters, governments and strategic holders, and so were not available to be traded on the market. Hence the free float method was introduced wherein only the number of scripts that were actually available for trade in the market, was used for index calculation. In the past few years, BSE has shifted all indices to the free-flat method, with the exception of BSE-PSU index.