Just like the Sensex, Nifty is also an index. Nifty reflects the National Stock Exchange. The name Nifty comes from the combination of National and Fifty. The selection of the top 50 stocks is from 12 different sectors, including information technology, financial services, consumer goods, telecommunications, automobiles, etc.
Earlier, the Sensex used the weighted market capitalization method. However, from September 1st, , the free-float market capitalization method has been in use. Upon selecting the 30 stocks for the index, it uses the free float market capitalization method to calculate the value of the index. The first step is to determine the free float market capitalization of 30 companies that form the index.
Free Float factor is the percentage of total shares a company issues and that are readily available to the common public to trade. This also means the total outstanding shares of the company. Additionally, the shares issued to the promoters, the government, etc. The market capitalization is the market value of the company. Once the free float market capitalization is determined. The value of BSE Sensex can be calculated using the formula below.
The base period year for Sensex calculation is The base value index is Using the above formula, one can calculate the value of BSE Sensex. To trade buy or sell securities on BSE, one needs to have a demat and a trading account. A demat will hold the shares in dematerialized or electronic form. Also, a demat account acts just like a bank account, where the securities are debited or credited based on the transaction. A trading account will facilitate the sale and purchase of securities online.
The next step is to register with a broker or brokerage platform, as one cannot directly purchase securities from the stock exchange. Stockbrokers are financial intermediaries who act as a link between the stock exchange and the trader. Many companies provide both trading and demat accounts. Both Nifty and Sensex use similar methods to derive their values.
However, there are a few basic differences between Nifty and Sensex. You may also like to read about the Sensex vs Nifty. Benchmark index is the primary metric for analyzing market trends. The order further gives us the right to respond to each and every preliminary observation within a period of 21 days and is thus only a temporary order restraining some actions till December 16th, when we will represent our position to SEBI. Even a perfunctory reading of the above mentioned order makes it clear that the only relevant strictures that have been passed against our organization are a temporary hold on the onboarding of new clients, and additional oversight and monitory from NSE and BSE.
It in no way prevents us from continuing to transact business on behalf of our existing clients as per their instructions, and in furtherance of investor best interests. The restriction on onboarding new clients is only for a twenty one day period subject to us submitting the clarifications and stating our position.
The quantum mentioned is incorrect. Karvy Realty is one of the group companies and investments were made in other subsidiary companies through this entity. We are of the firm belief that the investments made through owned funds of the group and borrowings other than the pledge of securities were fully compliant with the relevant provisions and directives of the regulator during the period that they were made.
Further, we wish to reiterate that all monies transferred from time to time were solely for the ongoing conduct of business in subsidiary firms and not a single penny went to enrich the promoters personal funds as is being insinuated.
This is highly misleading, completely inaccurate and damaging. Firstly, because if there is a default in our business, as stock broking is not a line of business where the term default is relevant, and the SEBI order itself neither mentions a default nor an amount of Rs crores.
We want to reiterate once again that nowhere in the SEBI order has an amount of Rs crores been mentioned, and that this number together with the word default is extremely misleading and damaging to our reputation. Please note that SEBI has restricted us only from acquiring new customers until the matter is resolved. They have given us 21 days to give a comprehensive response to their prima facie findings, and issued an interim order.
Most media have reported that we have been banned from trading. There is NO BAN at all whatsoever, except a restriction on onboarding new customers for a twenty-one day period. This is completely false and we will continue to service all our existing customers uninterruptedly.
Some media has alluded to the fact that our rapid diversification in last few years has resulted in this situation. This diversification into data-driven and IT based services compliments that nature of work in our core financial services business and has been ongoing for the last fifteen years.
This diversification is part of a well crafted strategy endorsed by our bankers as a way of safeguarding ourselves from market volatility and our diversification has had no impact whatsoever on the broking business. We will be providing a detailed explanation and clarifications to SEBI as required. There is no instance where there has been mis-utilization of client securities.
Established in , the stock exchange did not have an official index till Jan 1, when the Sensex was adopted for gauging the performance of the Indian markets. The Sensex comprises of 30 prominent stocks derived from all key sectors which are traded actively in the exchange. Thus, the Sensex truly reflects the movement of the Indian stock markets.
The level of the index is a direct reflection of the performance of the 30 selected key stocks in the market. Free-float market capitalization is defined as that proportion of total shares issued by the company that are readily available for trading in the market.
Sensex is an index comprising of the top 30 stocks, among some stocks listed on the BSE. It is assumed that these 30 stocks replicate the market. These 30 stocks are taken from 23 different industries operating in the Indian economy, based on parameters defined by the Exchange and managing the index.
Sensex is calculated taking into consideration the stock prices of 30 different companies listed on BSE. This is one of the best methods for calculating a stock market index. In the earlier years, Sensex would be calculated using the weighted market capitalization method. However, from September 1st, onwards the free-float market capitalization method is being used.
The top 30 companies that are taken into consideration are changed from time to time. This is done to make Sensex an accurate index.
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