Asia’s oldest stock market is the Bombay Stock Market (BSE). The BSE, which is located in Mumbai, India, was 1st founded in the year 1875. BSE is the eleventh-largest stock exchange in a world by market capitalisation. You’ll explore an in-depth information on a bse below:
Trading Mechanism at the BSE
– At the Bombay Stock Exchange (BSE), trading unfolds through its digital trading system known as BSE On-Line Trading (BOLT). Within this platform, authorized stock brokers execute trades on behalf of their clients.
– Trading starts over a course of a 2 separate sessions: an early-morning session begins at 9:15 AM as well as finishes at a 3:30 PM, as well as a afternoon session begins at 3:30 PM as well as finishes at 4:00 PM.
– The BSE has moved from the traditional open outcry trading system to fully automated screen based trading. This has improved price discovery and enhanced transparency.
– Trading on BSE occurs through an order driven market which matches buy and sell orders on a continuous basis during trading hours. Market orders/limit orders can be placed by investors through brokers.
– Circuit filters are applied on stocks to prevent excessive volatility beyond certain defined percentage limits.
Indices at BSE
Apart from SENSEX, the BSE has several other important indices:
– S&P BSE SENSEX 50 – Comprises of 50 large market cap stocks from SENSEX universe.
– S&P BSE 100 – Represents top 100 companies listed at BSE based on market cap.
– S&P BSE MidCap – Comprises mid-sized companies.
– S&P BSE SmallCap – Comprises small-sized companies.
– S&P BSE 200 – Covers 200 companies across large, mid and small size segments.
– S&P BSE 500 – Represent 500 large, mid and small companies covering all major industries in the Indian economy.
– Sectoral Indices – BSE has indices covering various sectors – Auto, Metal, Oil and Gas, Healthcare, IT, Consumer Durables etc.
Regulatory Oversight
– The overall functioning and regulation of securities markets including the BSE comes under the Securities and Exchange Board of India (SEBI).
– The BSE is professionally managed under the overall direction of its Board of Directors.
– All listed companies need to comply with rules and regulations set by SEBI and the BSE related to corporate governance, disclosure requirements, investor rights, etc.
– The BSE has in place standard operating procedures for trading, clearing, and settlement activities. It ensures the orderly and smooth functioning of the stock market.
Products Traded at BSE
The following key products are available to be traded on the Bombay Stock Exchange:
– Equity Shares – Investors can buy/sell shares of companies listed on the BSE through stock brokers.
– Derivatives – Index-based futures and options contracts are available for trading on indices like SENSEX and Nifty.
– Exchange Traded Funds (ETFs) – ETFs tracking various indices are listed and traded on the BSE.
– Corporate Bonds – Corporate debt securities like non-convertible debentures are listed and traded on the BSE.
Significance of BSE
– The BSE is the world’s largest exchange in terms of number of listed companies (over 5,000). It provides huge listing and trading opportunities for companies and investors alike.
– It has facilitated capital raising by Indian corporates to fund their growth and expansion over the years.
– The benchmark SENSEX is used extensively by investors in India and globally to measure the overall performance of the Indian stock markets.
– Over the decades, the BSE has created wealth for investors through various market cycles. It has stood strong even during market crises.
– The BSE has adopted the latest technology and ushered transparency as well as a higher degree of safety in trading activities.
– Small investors have a lively platform to take part in the success of Indian enterprises.
Conclusion
Established in 1875, the BSE (Bombay Stock Exchange), bolstered by robust regulation, cutting-edge technology, and the significant presence of 5paisa, has evolved into a premier Asian stock exchange. A driving force behind India’s capital market expansion, the BSE is poised for even greater achievements in the future, maintaining its pivotal role in shaping the region’s financial landscape.
