NSE

The National Stock Exchange of India was promoted by leading Financial institutions at the behest of the Government of India, and was incorporated in November 1992 as a tax-paying company. In April 1993, it was recognized as a stock exchange under the Securities Contracts (Regulation) Act, 1956. NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital market (Equities) segment of the NSE commenced operations in November 1994, while operations in the Derivatives segment commenced in June 2000.

Markets
Currently, NSE has the following major segments of the capital market:

Equity Futures and Options Retail Debt Market Wholesale Debt Market Currency futures Mutual Fund Stocks lending and borrowing

August 2008 Currency derivatives were introduced in India with the launch of Currency Futures in USD INR by NSE. Currently it has also launched currency futures in EURO, POUND & YEN. Interest Rate Futures was introduced for the first time in India by NSE on 31 August 2009, exactly after one year of the launch of Currency Futures. NSE became the first stock exchange to get approval for Interest rate futures as recommended by SEBIRBI committee, on 31 August 2009, a futures contract based on 7% 10 Year GOI bond (NOTIONAL) was launched with quarterly maturities.[10]

NSE also set up as index services firm known as India Index Services & Products Limited (IISL) and has launched several stock indices, including:[13]

S&P CNX Nifty(Standard & Poor's CRISIL NSE Index) CNX Nifty Junior CNX 100 (= S&P CNX Nifty + CNX Nifty Junior) S&P CNX 500 (= CNX 100 + 400 major players across 72 industries) CNX Midcap (introduced on 18 July 2005 replacing CNX Midcap 200)

[edit]Exchange

Traded Funds on NSE

NSE has a number of exchange traded funds. These are typically index funds and GOLD ETFs. Some of the popular ETF's available for trading on NSE are:

NIFTYBEES - ETF based on NIFTY index Nifty BEES Live quote GoldBees - ETF based on Gold prices. Tracks the price of Gold. Each unit is equivalent to 1 gm of gold and bears the price of 1gm of gold.

BankBees - ETF that tracks the CNX Bank Index.

BSE
History
The Phiroze Jeejeebhoy Towers house the Bombay Stock Exchange since 1980.

The Bombay Stock Exchange is the oldest exchange in Asia. It traces its history to the 1850s, when four Gujarati and one Parsi stockbroker would gather under banyan trees in front of Mumbai's Town Hall. The location of these meetings changed many times, as the number of brokers constantly increased. The group eventually moved to Dalal Street in 1874 and in 1875 became an official organization known as 'The Native Share & Stock Brokers Association'. In 1956, the BSE became the first stock exchange to be recognized by the Indian Government under the Securities Contracts Regulation Act. The Bombay Stock Exchange developed the BSE SENSEX in 1986, giving the BSE a means to measure overall performance of the exchange. In 2000 the BSE used this index to open its derivatives market, trading SENSEX futures contracts. The development of SENSEX options along with equity derivatives followed in 2001 and 2002, expanding the BSE's trading platform. Historically an open outcry floor trading exchange, the Bombay Stock Exchange switched to an electronic trading system in 1995. It took the exchange only fifty days to make this transition. This automated, screen-based trading platform called BSE On-line trading (BOLT) currently has a capacity of 8 million orders per day. The BSE has also introduced the world's first centralized exchange-based internet trading system, BSEWEBx.co.in to enable investors anywhere in the world to trade on the BSE platform.[5] The BSE is currently housed in Phiroze Jeejeebhoy Towers at Dalal Street, Fort area.

The Bombay Stock Exchange (BSE) (Marathi: Bombay hare Bzar) (formerly, The Stock Exchange, Bombay) is a stock exchangelocated on Dalal Street, Mumbai and is the oldest stock exchange in Asia. The equity market capitalization of the companies listed on the BSE wasUS$1.63 trillion as of December 2010, making it the 4th largest stock exchange in Asia and the 8th largest in the world.[1] The BSE has the largest number of listed companies in the world.[2] As of June 2011, there are over 5,085 listed Indian companies and over 8,196 scrips on the stock exchange,[3] the Bombay Stock Exchange has a significant trading volume. The BSE SENSEX, also called "BSE 30", is a widely used market index in India and Asia. Though many other exchanges exist, BSE and the National Stock Exchange of India account for the majority of the equity trading in India. While both have similar total market capitalization (about USD 1.6 trillion), share volume in NSE is typically two times that of BSE. The launch of SENSEX in 1986 was later followed up in January 1989 by introduction of BSE National Index (Base: 1983-84 = 100). It comprised 100 stocks listed at five major stock exchanges in India Mumbai, Calcutta, Delhi, Ahmedabad andMadras. The BSE National Index was renamed BSE-100 Index

from October 14, 1996 and since then, it is being calculated taking into consideration only the prices of stocks listed at BSE. BSE launched the dollar-linked version of BSE-100 index on May 22, 2006. BSE launched two new index series on 27 May 1994: The 'BSE-200' and the 'DOLLEX-200'. BSE-500 Index and 5 sectoral indices were launched in 1999. In 2001, BSE launched BSE-PSU Index, DOLLEX-30 and the country's first free-float based index - the BSE TECk Index. Over the years, BSE shifted all its indices to the free-float methodology (except BSE-PSU index). BSE disseminates information on the Price-Earnings Ratio, the Price to Book Value Ratio and the Dividend Yield Percentage on day-to-day basis of all its major indices. The values of all BSE indices are updated on real time basis during market hours and displayed through the BOLT system, BSE website and news wire agencies. All BSE Indices are reviewed periodically by the BSE Index Committee. This Committee which comprises eminent independent finance professionals frames the broad policy guidelines for the development and maintenance of all BSE indices. The BSE Index Cell carries out the day-to-day maintenance of all indices and conducts research on development of new indices.[8] SENSEX is significantly correlated with the stock indices of other emerging markets

Multi Commodity Exchange

Multi Commodity Exchange (MCX) is an independent commodity exchange based in India. It was established in 2003 and is based in Mumbai. The turnover of the exchange for the fiscal year 2009 was US$ 1.24 trillion, and in terms of contracts traded, it was in 2009 the world's sixth largest commodity exchange. ([1]) MCX offers futures trading in bullion, ferrous and non-ferrous metals, energy, and a number of agricultural commodities (mentha oil, cardamom, potatoes, palm oil and others). MCX has also set up in joint venture the MCX Stock Exchange. Earlier spin-offs from the company include the National Spot Exchange, an electronic spot exchange for bullion and agricultural commodities, and National Bulk Handling Corporation (NBHC) India's largest collateral management company which provides bulk storage and handling of agricultural products. It is regulated by the Forward Markets Commission.

MCX is India's No. 1 commodity exchange with 83% market share in 2009 The exchange's main competitor is National Commodity & Derivatives Exchange Ltd ([2]) Globally, MCX ranks no. 1 in silver, no. 2 in natural gas, no. 3 in crude oil and gold in futures trading ([3])

The highest traded item is gold. MCX has several strategic alliances with leading exchanges across the globe As of early 2010, the normal daily turnover of MCX was about US$ 6 to 8 billion

MCX now reaches out to about 800 cities and towns in India with the help of about 126,000 trading terminals

MCX COMDEX is India's first and only composite commodity futures price index

METAL

BULLION

Aluminium, Copper, Lead, Nickel, Steel Long Gold, Gold HNI, Gold M, i-gold, Silver, Silver HNI, Silver (Bhavnagar), Steel Long (Govindgarh), Steel M Flat, Tin, Zinc

FIBER

ENERGY

Cotton L Staple, Cotton M Staple, Cotton S Staple, Cotton Yarn, Kapas

Brent Crude Oil, Crude Oil, Furnace Oil, Natural Gas, M. E. Sour Crude Oil, ATF, Electricity(Now delisted), Carbon Credit

SPICES

PLANTATIONS

Cardamom, Jeera, Pepper, Red Chilli

Arecanut, Cashew Kernel, Coffee (Robusta), Rubber

PULSES

PETROCHEMICALS

Chana, Masur, Yellow Peas

HDPE, Polypropylene(PP), PVC

OIL & OIL SEEDS

Castor Oil, Castor Seeds, Coconut Cake, Coconut Oil, Cotton Seed, Crude Palm Oil, Groundnut Oil, Kapasia Khalli, Mustard Oil, Mustard Seed (Jaipur), Mustard Seed (Sirsa), RBD Palmolein, Refined Soy Oil, Refined Sunflower Oil, Rice Bran DOC, Rice Bran Refined Oil, Sesame Seed, Soymeal, Soy Bean, Soy Seeds

CEREALS

OTHERS

Maize, Barley

Guargum, Guar Seed, Gurchaku, Mentha Oil, Potato (Agra), Potato (Tarkeshwar)

Badla (stock trading)

From Wikipedia, the free encyclopedia

Badla was an indigenous carry-forward system invented on the Bombay Stock Exchange as a solution to the perpetual lack of liquidity in the secondary market. Badla were banned by the Securities and Exchange Board of India or SEBI in 1993 (effective March 1994), amid complaints from foreign investors, with the expectation that it would be replaced by a futures-and-options exchange.[1] Such an exchange was not established and badla were legalized again in 1996 (with a carry-forward limit of Rs 20 crore per broker) and banned again on July 2, 2001, following the introduction of futures contracts in 2000.[2][3] Badla trading involved buying stocks with borrowed money with the stock exchange acting as an intermediary at an interest rate determined by the demand for the underlying stock and a maturity not greater than 70 days. Like a traditional futures contract, badla is a form of leverage; unlike futures, the brokernot the buyer or selleris responsible for the maintenance of the marked-to-market margin.[4] The mechanism of badla finance can be explained as follows: Suppose A has to buy 100 shares of a company at Rs 50 each. But he doesn't has enough money now. But the value of shares is very less now, so in order to buy the shares at current prices, A can do a badla transaction. Now there is a badla financier B who has enough money to purchase the shares, so on A's request, B purchases the shares and gives the money to his broker. The broker gives the money to exchange and the shares are transferred to B. But the exchange keeps the shares with itself on behalf of B. Now, say one month later, when A has enough money, he gives this money to B and takes the shares. The money that A gives to B is slightly higher than the total value of the shares. This difference between the two values is the interest as badla finance is treated as a loan from B to A. The rate of interest is decided by the exchange and it changes from time to time.

What is Carry-Forward System? In common parlance the Carry-Forward system is known as Badla, which means something in return. The Carry Forward system (CF system) of transactions has been in practice for several decades in the Stock Exchange, Mumbai. The CF system serves three needs of the stock market : It is a quasi-hedging mechanism : If an investor feels that the price of a particular share is expected to go up or down, without giving or taking the delivery he can participate in the possible fluctuation of the share. It is a stock lending mechanism : If he wishes to short sell without owning underlying security, the stock lender steps into the CF system and lends his stock for a charge. It is a financing mechanism : If he wishes to buy the share without paying the full consideration, the financier steps into the CF system and provides the finance to fund the purchase.

Why is CF system necessary ? The Carry-Forward system is necessary, so long as the three needs mentioned above are taken care of. These are also possible by introduction of options and futures to take care of the hedging requirement, banks becoming more liberal in lending against shares and lastly a stock lending system being put in place. Once the three systems are put in place the carry forward system may die a natural death.