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National Stock Exchange of India

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National Stock Exchange Limited
NSE Logo
TypeStock Exchange
LocationMumbai, India
Coordinates19°3′37″N 72°51′35″E / 19.06028°N 72.85972°E / 19.06028; 72.85972
Founded1992
OwnerNational Stock Exchange of India Limited
Key peopleMr.Ravi Narain - Managing Director
CurrencyINR
No. of listings1806
Market capRs 47,01,923 crore(2009 August)
IndicesS&P CNX Nifty
CNX Nifty Junior
S&P CNX 500
Websitewww.nse-india.com

The National Stock Exchange of India Limited (Marathi: राष्ट्रीय शेअर बाजार) is a Mumbai-based stock exchange. It is the largest stock exchange in India in terms of daily turnover and number of trades, for both equities and derivative trading.[1]. NSE has a market capitalization of around Rs 47,01,923 crore (7 August 2009) and is expected to become the biggest stock exchange in India in terms of market capitalization by 2009 end.[2]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 Nifty, 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[3]. There are at least 2 foreign investors NYSE Euronext and Goldman Sachs who have taken a stake in the NSE.[4] As of 2006, the NSE VSAT terminals, 2799 in total, cover more than 1500 cities across India [5]. In October 2007, the equity market capitalization of the companies listed on the NSE was US$ 1.46 trillion, making it the second largest stock exchange in South Asia. NSE is the third largest Stock Exchange in the world in terms of the number of trades in equities.[6]It is the second fastest growing stock exchange in the world with a recorded growth of 16.6%.[7]

Origins

NSE building at BKC, Mumbai

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.

Innovations

NSE has remained in the forefront of modernization of India's capital and financial markets, and its pioneering efforts include:

  • Being the first national, anonymous, electronic limit order book (LOB) exchange to trade securities in India. Since the success of the NSE, existent market and new market structures have followed the "NSE" model.
  • Setting up the first clearing corporation "National Securities Clearing Corporation Ltd." in India. NSCCL was a landmark in providing innovation on all spot equity market (and later, derivatives market) trades in India.
  • Co-promoting and setting up of National Securities Depository Limited, first depository in India[2].
  • Setting up of S&P CNX Nifty.
  • NSE pioneered commencement of Internet Trading in February 2000, which led to the wide popularization of the NSE in the broker community.
  • Being the first exchange that, in 1996, proposed exchange traded derivatives, particularly on an equity index, in India. After four years of policy and regulatory debate and formulation, the NSE was permitted to start trading equity derivatives
  • Being the first and the only exchange to trade GOLD ETFs (exchange traded funds) in India.
  • NSE has also launched the NSE-CNBC-TV18 media centre in association with CNBC-TV18.
  • NSE.IT Limited, setup in 1999 , is a 100% subsidiary of the National Stock Exchange of India. A Vertical Specialist Enterprise, NSE.IT offers end-to-end Information Technology (IT) products, solutions and services.

Markets

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

  • Equity
  • Futures and Options
  • Retail Debt Market
  • Wholesale Debt Market
  • Currency futures

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 GOI bond (NOTIONAL) was launched with quarterly maturities. [3]

Hours

NSE's normal trading sessions are conducted from 9:00 am India Time to 3:30 pm India Time on all days of the week except Saturdays, Sundays and Official Holidays declared by the Exchange (or by the Government of India) in advance.[8] The exchange, in association with BSE (Bombay Stock Exchange Ltd.), is thinking of revising its timings from 9.00 am India Time to 5.00 pm India Time.

There were System Testing going on and opinions, suggestions or feedback on the New Proposed Timings are being invited from the brokers across India. And finally on Nov 18, 2009 regulator decided to drop their ambitious goal of longest Asia Trading Hours due to strong opposition from its members.

On Dec 16, 2009, NSE announced that it would pre-pone the market opening at 9am from Dec 18, 2009. So NSE trading hours will be from 9:00 am till 3:30 pm India Time.

However, on Dec 17, 2009, after strong protests from brokers, the Exchange decided to postpone the change in trading hours till Jan 04, 2010.

NSE new market timing from Jan 04, 2010 is 9:00 am till 3:30 pm India Time.

Indices

NSE also set up as index services firm known as India Index Services & Products Limited (IISL) and has launched several stock indices, including [9] :

  • 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)

Exchange Traded Funds on NSE

NSE has a number of exchange . These are typically index funds and GOLD etfs. Some of the popular etf's on NSE are.

1. NIFTYBEES - ETF based on NIFTY index Nifty BEES Live quote 2. GoldBees - ETF based on Gold prices. Tracks the price of Gold. Each unit is equalent to 1 gm of gold and bears the price of 1gm of gold. 3. BankBees - ETF that tracks the CNX Bank Index. BSE and NSE

Certifications

NSE also conducts online examination and awards certification, under its programmes of NSE's Certification in Financial Markets (NCFM)[4]. Currently, certifications are available in 19 modules, covering different sectors of financial and capital markets. Branches of the NSE are located throughout India.

See also

References

  1. ^ National Stock Exchange
  2. ^ "NSE likely to overtake BSE in marketcap". The Financial Express. Retrieved 2009-08-11.
  3. ^ Personal website of R.Kannan
  4. ^ India’s SEBI raises exchange ownership cap to 15%
  5. ^ NSE - About Us - Facts & Figures
  6. ^ [1] "World Federation of Exchanges (2007)"
  7. ^ Now, NSE 2nd fastest growing stock exchange
  8. ^ , National Stock Exchange of India via Wikinvest
  9. ^ NSE - Major indices
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