National Stock Exchange of India

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National Stock Exchange
राष्ट्रीय शेयर बाज़ार
National Stock Exchange of India 2.jpg
Location of National Stock Exchange in India
Location of National Stock Exchange in India
National Stock Exchange
Location of National Stock Exchange in India
Type Stock Exchange
Location Mumbai, Maharashtra, India
Coordinates 19°3′37″N 72°51′35″E / 19.06028°N 72.85972°E / 19.06028; 72.85972
Founded 1992
Owner National Stock Exchange of India Limited
Key people CA.Chitra Ramakrishna (MD)
Currency Indian rupee (INR)
MarketCap US$1.178 trillion (Oct 2012)[1]
Indexes S&P CNX Nifty
CNX Nifty Junior
S&P CNX 500
Website www.nseindia.com
NSE building at BKC, Mumbai

The National Stock Exchange (NSE) (Hindi: राष्ट्रीय शेयर बाज़ार Rashtriya Śhare Bāzaār) is stock exchange located at Mumbai, India. It is the 11th largest stock exchange in the world by market capitalization and largest in India by daily turnover and number of trades, for both equities and derivative trading.[2] NSE has a market capitalization of around US$1 trillion and over 1,652 listings as of July 2012.[3] Though a number of other exchanges exist, NSE and the Bombay Stock Exchange are the two most significant stock exchanges in India, and between them are responsible for the vast majority of share transactions. The NSE's key index is the S&P CNX Nifty, known as the NSE NIFTY (National Stock Exchange Fifty), an index of fifty major stocks weighted by market capitalisation.

NSE is mutually owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries in India but its ownership and management operate as separate entities.[4] There are at least 2 foreign investors NYSE Euronext and Goldman Sachs who have taken a stake in the NSE.[5] As of 2006, the NSE VSAT terminals, 2799 in total, cover more than 1500 cities across India.[6] In 2011, NSE was the third largest stock exchange in the world in terms of the number of contracts (1221 million) traded in equity derivatives.[7] It is the second fastest growing stock exchange in the world with a recorded growth of 16.6%.[8]

Contents

Origins [edit]

The National Stock Exchange of India was set up by [[Government of India]] on the recommendation of Pherwani Committee in 1991.Promoted by leading Financial institutions essentially led by [[Industrial Development Bank of India|IDBI]] at the behest of the [[Government of India]], it 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.

Objectives [edit]

  1. Establishing nationwide trading facilities for all types of securities.
  2. Ensuring equal access to investors all-over the country through an appropriate communication network.
  3. Meeting international benchmarks and standards.
  4. Enabling shorter settlement cycles and book entry settlements.

Markets [edit]

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

Equities

  • Equities
  • Indices
  • Mutual Funds
  • Exchange Traded Funds
  • Initial Public Offerings
  • Security Lending and Borrowing Scheme

Derivatives

  • Equity Derivatives (including Global Indices like S&P 500, Dow Jones and FTSE )
  • Currency Derivatives
  • Interest Rate Futures

Debt

  • Retail Debt Market
  • Wholesale Debt Market
  • Corporate Bonds

Equity Derivatives The National Stock Exchange of India Limited (NSE) commenced trading in derivatives with the launch of index futures on June 12, 2000. The futures and options segment of NSE has made a mark for itself globally. In the Futures and Options segment, trading in S&P CNX Nifty Index, CNX IT index, Bank Nifty Index, Nifty Midcap 50 index and single stocks are available. Trading in Mini Nifty Futures & Options and Long term Options on S&P CNX Nifty are also available. The average daily turnover in the F&O Segment of the Exchange during 2009-10 was ` 72,392 crore (US $ 16,097 million)

On August 29, 2011, National Stock exchange launced derivative contracts on the world’s most followed equity indices, the S&P 500 and the Dow Jones Industrial Average. This was the first time that derivative contracts on global indices are available in India. This is the also the first time in the world that futures contracts on the S&P 500 index were introduced and listed on an exchange outside of their home country, USA. The new contracts include futures on both the DJIA and the S&P 500, and options on the S&P 500. The first day volumes at the close of trading on August 29, 2011 at 3.30 pm, on the 2 indices in futures and options contracts was nearly Rs 122 crores (1220 million).

On May 3, 2012,The National Stock exchange launched derivative contracts (futures and options) on FTSE 100, the widely tracked index of the UK equity stock market. This was the first of its kind for an index of the UK equity stock market to be launched in India. FTSE 100 includes 100 largest UK listed blue chip companies and has given returns of 17.8 per cent on investment over three years. The index constitutes 85.6 per cent of UK’s equity market cap. NSE recorded a volume of 500 crores (5000 million) on the 1st day of trading.[citation needed]

Currency Derivatives In August 2008 currency derivatives were introduced in India with the launch of Currency Futures in USD INR by NSE. It also added currency futures in euros, pounds and yen. Interest Rate Futures were introduced for the first time in India by NSE on 31 August 2009, exactly one year after the launch of Currency Futures.

Debt Market NSE became the first stock exchange to get approval for interest rate futures, As recommended by SEBI-RBI committee, on 31 August 2009, a futures contract based on 7% 10 Year Government of India (Notional) was launched with quarterly maturities.[9]

Trading schedule [edit]

Trading takes place on all days of the week except Saturdays & Sundays. The market timings are as follows:

  • (1) Pre-open session (Regular)
    • Order entry & modification Open: 09:00 hrs
    • Order entry & modification Close: 09:08 hrs*

*with random closure in last one minute. Pre-open order matching starts immediately after close of pre-open order entry.

  • (2) Pre-open Session for IPO and Relist Securities
    • Order entry & modification Open: 09:00 hrs
    • Order entry & modification Close: 09:45 hrs*

*with random closure in last one minute. Pre-open order matching starts immediately after close of pre-open order entry.

  • (3) Regular trading session
    • Normal Market Open: 09:15 hrs
    • Normal Market Close: 15:30 hrs

Block deal session is held between 09:15 hrs and 09:50 hrs.

  • (4) The Closing Session is held between 15.40 hrs and 16.00 hrs.

The Exchange may also extend, advance or reduce trading hours when its deems fit and necessary.

Exchange Traded Funds on NSE [edit]

ETF's launched on NSE Exchange Traded Funds are essentially Index Funds that are listed and traded on exchanges like stocks. An ETF is a basket of stocks that reflects the composition of an Index, like S&P CNX Nifty. The ETFs trading value is based on the net asset value of the underlying stocks that it represents.

ETF's Scheme launched on NSE

  • Equity
  • Gold
  • Debt
  • World Indices

In recent times, Exchange-traded funds (ETFs) have gained a wider acceptance as financial instruments whose unique advantages over mutual funds have caught the eye of many an investor. These instruments are beneficial for Investors that find it difficult to master the tricks of the trade of analyzing and picking stocks for their portfolio. Various mutual funds provide ETF products that attempt to replicate the indices on NSE, so as to provide returns that closely correspond to the total returns of the securities represented in the index.

Certifications [edit]

NSE also conducts online examination and awards certification, under its programmes of NSE's Certification in Financial Markets (NCFM).[10] Currently, certifications are available in 32 modules, covering different sectors of financial and capital markets, both at beginner and advanced levels. The list of various modules can be found at the official site of NSE India. Branches of the NSE are located throughout India. NSE has been offering a short-term course called NSE Certified Capital Market Professional (NCCMP) since August 2009.[11]

See also [edit]

References [edit]

  1. ^ World-exchanges.org
  2. ^ "National Stock Exchange". Nasscom.in. 2006-07-12. Retrieved 2010-08-26. [dead link]
  3. ^ "NSE likely to overtake BSE in marketcap". The Financial Express. Retrieved 2009-08-11. 
  4. ^ "Personal website of R.Kannan". Geocities.com. 2004-08-22. Archived from the original on 2009-10-28. Retrieved 2010-08-26. 
  5. ^ India’s SEBI raises exchange ownership cap to 15%
  6. ^ "NSE - About Us - Facts & Figures". Nse-india.com. Retrieved 2010-08-26. 
  7. ^ "WFE 2011 market highlights: page 17"
  8. ^ "Now, NSE 2nd fastest growing stock exchange". Expressindia.com. 2007-08-29. Retrieved 2010-08-26. 
  9. ^ "Interest rate futures: NSE, MCX-SX set to fight it out - Business News - News - MSN India". News.in.msn.com. Retrieved 2010-12-15. [dead link]
  10. ^ [1]
  11. ^ http://www.nseindia.com/education/content/module_nccmp.htm

14. http://www.nseindia.com/content/press/pr_09012013.pdf Agreement on Launch of S&P CNX Nifty Futures in Japan

External links [edit]

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