BSE Basics

I decided to dabble in the share market, but figured I need to learn some basics before I make my hands dirty and share it with everyone as I go along. I'll be studying the Indian Share markets and hopefully am on my way to an exciting (and profitable) journey!

• Bombay Stock Exchange (BSE) is India's first stock exchange which obtained recognition in 1956.
• It changed to an online screen based order driven trading system in 1995.
• It was demutualized in 2005. Its strategic exchange partners now are Deutsche Börse and Singapore Exchange.
• For the uninitiated (like me), Demutualisation is the process of changing a cooperative association into a public company. This is done by converting interests of members into shareholdings which can then be traded through a stock exchange.
• It is world No.1 in terms of number of companies listed and world's 5th in transactions!!
• One can choose from nearly 4,700 listed companies which are categorized as A, B, S, T and Z groups.
• The details of these groups will be covered in the next post!
• The BSE sensex or the Sensitive index is a value weighted index composed of 30 stocks started in 01 Jan 1986.
• These comprise of the largest and the most traded stocks representing twelve sectors on the BSE.
• A separate post will cover the methodology of the sensex.
• Apart from the sensex there are 21 indices, including 12 sectoral indices.
• The BSE has a transparent market allowing trading in equity, debt instruments and derivatives.
• ETF: Exchange traded funds. It is an investment vehicle or tool that enables investors to invest trade or      hedge.
• Equity trading: The process of buying and selling of company stock shares.
• Debt instruments: Notes, bonds, certificates, mortgages, leases or other agreements between lender and borrower.
• Derivatives: A security whose price is derived from one or more underlying assets. The assets include stocks, bonds, commodities, currencies or market indices.
• BOLT: BSE online trading system.
• Corporate bonds: A debt security issued by corporation to investors. Backing for the bond is the payment ability of the company or its physical assets.
• Director’s database: Single point access to the board of directors of listed companies.
• ICERS: Indian Corporate Electronic Reporting System facilitates the corporate in sharing their corporate announcements.

Priyanka S Vaidya