Bombay Stock Exchange
The Bombay Stock Exchange Limited (formerly, The Stock Exchange, Mumbai; popularly called The Bombay Stock Exchange, or BSE) is located at Dalal Street, Mumbai. Established in 1875, it is the oldest stock exchange in Asia. There are around 3,500 Indian companies listed with the stock exchange, and has a significant trading volume. As of July 2005, the market capitalization of the BSE was about Rs. 20 trillion (US $ 466 billion). The BSE SENSEX (SENSitive indEX), also called the BSE 30, is a widely used market index in India and Asia. As of 2005, it is among the 5 biggest stock exchanges in the world in terms of transactions volume. Along with the NSE, the companies listed on the BSE have a combined market capitalization of US$ 125.5 billion.
An informal group of 22 stockbrokers began trading under a banyan tree opposite the Town Hall of Bombay from the mid-1850s, each investing a (then) princely amount of Rupee 1. This banyan tree still stands in the Horniman Circle Park, Mumbai. The informal group of stockbrokers organized themselves as the The Native Share and Stockbrokers Association which, in 1875, was formally organized as the Bombay Stock Exchange (BSE).
In January 1899, the stock exchange moved into the Brokersí Hall after it was inaugrated by James M Maclean. After the First World War, the BSE was shifted to an old building near the Town Hall. In 1928, the plot of land on which the BSE building now stands (at the intersection of Dalal Street, Bombay Samachar Marg and Hammam Street in downtown Mumbai) was acquired, and a building was constructed and occupied in 1930.
Premchand Roychand was a leading stockbroker of that time, and he assisted in setting out traditions, conventions, and procedures for the trading of stocks at Bombay Stock Exchange and they are still being followed.
Several stock broking firms in Mumbai were family run enterprises, and were named after the heads of the family. The following is the list of some of the initial members of the exchange, and who are still running their respective business.
- D.S. Prabhudas & Company (now known as DSP, and a joint venture partner with Merrill Lynch)
- Jamnadas Morarjee (now known as JM)
- Champaklal Devidas (now called Cifco Finance)
- Brijmohan Laxminarayan
In 1956, the Government of India recognized the Bombay Stock Exchange as the first stock exchange in the country under the Securities Contracts (Regulation) Act.
The BSE moved into its current premises - the Phiroze Jeejeebhoy Towers - in 1980. The Bombay Stock Exchange followed the familiar outcry system for stock trading up until 1995, when it was replaced by an electronic (eTrading) system. In 2005, the status of the exchange changed from an Association of Persons (AoP) to a full fledged corporation under the BSE (Corporatization and Demutualization) Scheme, 2005 (and its name was changed to The Bombay Stock Exchange Limited).
The BSE SENSEX (also known as the BSE 30) is a value-weighted index composed of 30 scrips, with the base April 1979 = 100. The set of companies which make up the index has been changed only a few times in the last 20 years. These companies account for around one-fifth of the market capitalization of the BSE.
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