Contents
- Introduction
- History of BSE
- BSE Achievements
- Stock Market Investments
- Difference Between NSE & BSE
- Marketplace Technologies
- BSE Institute
- Central Depository Services
- Indian Clearing Corporation Limited
- India International Exchange IFSC Limited(India INX)
- India International Clearing Corporation(IFSC) Limited(India ICC)
- BSE Debt Market
- Fixed Income Markets – Powering the World
- Indian Debt Market – Pillars of the Indian Economy
- Transformations in the Market Structure
- BSE Interest Rate Future
- Conclusion
Introduction
The Bombay Stock Exchange (BSE) is the first and largest security market in India. It was established in 1875. Based in Mumbai, the BSE lists 6,000 companies(approximately) and is one of the leading exchanges in the world along with the NYSE, NASDAQ, London Stock Exchange Group, Japan Exchange Group, and Shanghai Stock Exchange.
There are approximately 6000 companies listed on BSE making it the world’s No. 1 exchange in terms of listed companies. The companies listed on BSE have a total market capitalization of US$2.2 trillion as of March 2019. It is also one of the world’s leading exchanges.
BSE provides an efficient and transparent market for trading in equity, currencies, debt instruments, derivatives, mutual funds. The BSE SME is India’s largest SME platform which has listed over 250 companies and continues to grow at a steady pace. BSE StAR MF is India’s largest online mutual fund platform which process over 27 lakh transactions per month and adds almost 2 lakh new SIPs ever month. The BSE Bond, the transparent and efficient electronic book mechanism process for a private placement of debt securities, is the market leader with more than Rs 2.09 lakh crore of fundraising from 530 issuances. (F.Y. 2017-2018).
History of BSE
BSE is the oldest stock exchange in Asia. Its history dates back to 1855 when 22 stockbrokers would gather under banyan trees in front of Mumbai’s Town Hall. The location of these meetings kept on changing to accommodate the increasing number of brokers. The group, at last, moved to Dalal Street in 1874 and became an official organization known as “The Native Share & Stock Brokers Association” in 1875.
The Bombay stock exchange was founded by Premchand Roychand, influential businessmen in 19th-century Bombay. He made a fortune in the stockbroking business and came to be known as the Cotton King, the Bullion King or just the Big Bull. He was also the founder of the Native Share and Stock Brokers Association, an institution which is now known as the BSE.
BSE’s popular equity index – the S&P BSE SENSEX – is India’s most widely tracked stock market benchmark index. It is traded internationally on the EUREX as well as leading exchanges of the BRCS nations (Brazil, Russia, China, and South Africa).
Being such old stock exchange, BSE can provide the time-series data that goes back to 1979. Earlier considered as a small wonder, BSE has become one of the industry giants over the years.
BSE Achievements
The BSE is a Partner Exchange of the United Nations Sustainable Stock Exchange initiative. BSE established India INX on 30 December 2016. India INX is the first international exchange of India. BSE launches commodity derivatives contracts in gold, silver.
BSE is the first Exchange in the country and second in the world to receive the Information Security Management System Standard BS 7799-2-2002 certification for its On-Line trading System (BOLT). It operates one of the most respected capital market educational institutes(Institutes which help people to become specialists in the stock exchange and encourage people who want to invest in stocks) in the country (the BSE Institute Ltd.). BSE is also providing depository services through its Central Depository Services Ltd. (CDSL) arm.
Stock Market Investments
Stock market investments are the only way for building good capital in a short time for most people. The market has not changed over the years. The only thing that needs to change is the perspective of investors towards the market. Despite seeing so many ups and downs, the market is still offering the same benefits and risk situations. Instead of suffering from anxiety before entering the stock market, know a few reasons that will tell you about the right stock investments.
Stock Market is Neutral to its investors
The stock market does not care about your plans or strategies. It does not have any agenda and pattern. This makes the market fairly impartial which is a good thing for investors. This is because there are no trade secrets or magic formula to make money. No one has to make secret handshakes to get something extra from the market. The market is open to everyone and offers similar opportunities to everyone.
Use the Information Wisely
People tend to think that institutional investors have more advantages due to their resources and full-time professionals. You can avail of these benefits as well. This is because you can also access the same information as them. The crucial thing is to know how to deal with the data and what to do with it.
Involved Risks and Rewards
Sometimes people also feel that the stock market is targeting them for a disaster. This is not true at all. People who feel that way are either on the bad side of the risk or have gone through high-risk situations. However, high risk means greater rewards as well along with a greater chance of failure.
Difference Between NSE & BSE
BSE and NSE are the top securities exchange of India. Where BSE is the oldest one & NSE is the youngest one.
| Basis of comparison | NSE | BSE |
|---|---|---|
| Date of Establishment | NSE was founded in 1992 | BSE was founded in 1875 |
| Position Ascertained | It is considered to be the largest stock exchange in India. | It has been the most ancient stock exchange in Asia. |
| Products Offered | It facilitates trading in equity, equity derivatives, debt and currency derivatives. | It facilitates trading in equity, debt derivatives, currencies, and mutual funds. |
| Benchmark | NIFTY is the benchmark and it comprises 50 companies | SENSEX is the benchmark and it comprises of 30 companies |
| Market Capitalisation | Around Rs.1.5 trillion | Around Rs.1.68 trillion |
| Index | NIFTY (National Fifty) is the index of NSE, it displays 50 most traded companies. | BSE’s index is known by the name SENSEX (Sensitive Index) which shows 30 top trading companies. |
| Year of recognition | NSE got recognized as a Stock Exchange in 1993. | BSE got recognized as a stock exchange in 1957. |
| Introduction to Modernise trading System | NSE was the first to introduce the modernized trading system in the country in 1992. | BOLT was introduced by BSE in 1995.BSE Group Companies |
| Global Position | NSE stood on the 9th position in the list of top stock exchanges | BSE stood on the 10th position in the list of top stock exchanges |
Marketplace Technologies
Marketplace Technologies Pvt. Ltd. (MT) is located in Mumbai, the commercial capital of India. MT is a leading provider of cutting edge IT solutions with a focus on Commodities, Banking, and Financial Services markets in India.
BSE Institute
BSE Institute Ltd renders various courses, certifications, and other learning solutions. Courses offered by them are designed to help in developing the required capabilities and understand the trends and be prepared for the stock market environment.
Central Depository Services
CDSL, a leading securities depository, is promoted by BSE Ltd. and by leading private and public sector banks. Presently, CDSL’s services are delivered by 583 Depository Participants to more than 1.09 crore depository account holders from over 16,000 locations across India.
Indian Clearing Corporation Limited
Indian Clearing Corporation Limited (“ICCL”) was incorporated on April 2007 as a wholly-owned subsidiary of BSE. ICCL clears and settles trades executed on all the segments of BSE, including Equity Cash, BSE SME, Offer for Sale, Securities Lending & Borrowing, Equity Derivatives, Debt Segment, Sovereign Gold Bonds, Interest Rate Futures and the Currency Derivatives Segment. It also settles trades reported on the Indian Corporate Debt Segment and the Mutual Fund segment.
India International Exchange IFSC Limited(India INX)
India Inx, a wholly-owned subsidiary of BSE Ltd, commenced its trading activities on January 16, 2017, and is India’s first International Exchange set up at GIFT City. It is one of the world’s most advanced technology platforms with a turn-around time of 4 microseconds and operates for 22 hours a day to allow international investors and Non-Residents Indians to trade from anywhere across the globe.
India International Clearing Corporation(IFSC) Limited(India ICC)
India International Clearing Corporation (IFSC) Limited (India ICC), a CARE AAA rated clearing corporation, is a Securities and Exchange Board of India (SEBI) recognized Central Counter Party, providing clearing & settlement and risk management services. It is a wholly-owned subsidiary of the BSE and is located at the IFSC, GIFT City.
BSE Debt Market
The capital market comprises of equities and debt markets. Debt instruments called fixed income securities are issued by a wide range of organizations like the Central and State Governments, statutory corporations or bodies, banks, financial institutions, and corporate bodies.
Fixed Income securities are one of the most innovative and dynamic instruments that evolved in the financial system ever. They are on the concept of interest and the time value of money.
Fixed Income Markets – Powering the World
The Fixed Income Securities market was the earliest of all the securities markets in the world. The Fixed Income Securities Market, also known as the debt market or the bond market. The Debt Market has a very prominent role to play in the efficient functioning of the world financial system and in catalyzing the economic growth of nations across the globe.
Indian Debt Market – Pillars of the Indian Economy
The Debt Market plays a very critical role for any growing economy which needs to employ a large amount of capital and resources for achieving the desired industrial and financial growth. The Indian economy which has grown at more than 7% p.a. in the last decade and is on the take-off stage for double-digit growth would have to meet its resources requirements from a robust and active debt market in India.
The Government Securities market called the ‘G-Sec’ market is the oldest and the largest component of the Indian debt market in terms of market capitalization, outstanding securities, and trading volumes. The G-Sec market plays a vital role in the Indian economy as it provides the benchmark for determining the level of interest rates in the country.
Transformations in the Market Structure
The first half of the twentieth century had shown a significant amount of retail interest and participation in the G-Sec market with more than half the holdings of G-Secs issued being held by retail investors, a trend which continued until the early sixties. The rapidly expanding volumes in the Wholesale Debt Market over the past few years bear the promise of an immense and attractive financial market with a strong potential for retail participation.
The Hon’ble Union Finance Minister, while presenting the Union Budget for 2006-2007, accepted the recommendations of the High-Level Committee on Corporate Bonds and Securitization and made a significant policy announcement about the creation of a single, unified exchange-traded market for corporate bonds in India.
BSE Interest Rate Future
MIBOR is the interest rate at which the banks in the country borrow from one another for short term purposes. Financial Benchmarks India Pvt Ltd has announced the overnight MIBOR on a daily basis and it is computed by the Clearing Corporation of India (CCIL).
The MIBOR rate is based on trade-weighted interbank call money transactions on the Negotiated Dealing System call platform of CCIL between 9 am and 10 am.
Conclusion
The stock exchanges have been recognized by the Securities and Exchange Board of India (SEBI). The corporate office of BSE and NSE the exchanges are located in Mumbai. BSE and NSE have a nation-wide existence and have been also able to cater to the customers located across the globe. BSE and NSE both play an extremely crucial role in providing an effective, formalized and transparent mechanism to the market participants for trading in diversified financial securities.
This blog on BSE was to make you aware of the concept, history, and the difference between BSE & NSE. Our company WealthBucket is a CA/CS Firm providing various services related to Mutual Funds like investing in Large Cap Mutual funds, Equity Funds, Debt Funds, etc.
You can contact us on +91 9999379929 or you can mail your queries on our mail contact@wealthbucket.in.
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