According to the classification of the third-level industry of the exchange, an index has been created to measure the returns of all companies classified under the capital markets segment. Its components are drawn from the BSE 1000 index, ensuring the presentation in the wider universe of the listed entities.
According to one release, the index is calculated using the float-adjusting market capitalization method, a global accepted approach that assigns companies weight on the basis of their free-float market cap rather than total market capitalization. With the date of the first value fixed on June 18, 2018, the basis value of the index is set to 1000. In line with global best practices, the reconstruction of the index in June and December will be half-annual.
The Capital Markets Index introduces the BSE’s growing regional indicators and offers a focused tool to investors and fund administrators to traq the influence of the country’s financial market moderators.
The exchange noted that the index can provide multiple purposes from the construction of passive investment products of the Benchmarking Portfolio Management Services (PMS), mutual fund schemes and other investment portfolio from exchange trade funds (ETFs) and index funds.
The inauguration of the new index has come at a time when India’s financial sector is gaining rapid growth, with growing investors’ participation, IL panda liquidity and more institutional activity in capital markets. By offering a benchmark dedicated to this industry, the purpose of BSE is to provide better transparency, facilitate product innovation, and enable investors to diversify the corresponding strategy of regional trends.
With this launch, the BSE has strengthened the position as a leading provider of indices corresponding to the landscape of India’s growing investment investment. The Capital Market Index is expected to attract interest from both domestic and global investors who are looking for track and participation in the capital markets.
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