Stock exchange

Founded November 1992

Headquarters Mumbai, India
Website www.nse-india.com

INTRODUCTION:

The National Stock Exchange of India Limited (NSE), is a Mumbai-based stock

exchange. It is the largest stock exchange in India and the third largest in the world in
terms of volume of transactions[1]. NSE is mutually-owned by a set of leading financial
institutions, banks, insurance companies and other financial intermediaries in India but its
ownership and management operate as separate entities[2]. As of 2006, the NSE VSAT
terminals, 2799 in total, cover more than 1500 cities across India [3]. In July 2007, the
NSE had a total market capitalization of 42,74,509 crore INR making it the second-
largest stock market in South Asia in terms of market-capitalization[4].

The National Stock Exchange of India was promoted by leading Financial institutions at
the behest of the Government of India, and was incorporated in November 1992 as a tax-
paying company. In April 1993, it was recognized as a stock exchange under the
Securities Contracts (Regulation) Act, 1956. NSE commenced operations in the
Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities)
segment of the NSE commenced operations in November 1994, while operations in the
Derivatives
 Ownership and management
Nifty was developed by the economists Ajay Shah and Susan Thomas, then at IGIDR.
Later on, it came to be owned and managed by India Index Services and Products Ltd.
(IISL), which is a joint venture between NSE and CRISIL. IISL is India's first specialised
company focused upon the index as a core product. IISL have a consulting and licensing
agreement with Standard & Poor's (S&P), who are world leaders in index services.

CNX stands for CRISIL NSE Indices. CNX ensures common branding of indices, to
reflect the identities of both the promoters, i.e. NSE and CRISIL. Thus, 'C' stands for
CRISIL, 'N' stands for NSE and X stands for Exchange or Index. The S&P prefix belongs
to the US-based Standard & Poor's Financial Information Services.

•
o The average total traded value for the last six months of all Nifty stocks is
approximately 55.15% of the traded value of all stocks on the NSE.
o Nifty stocks represent about 59.49% of the total market capitalization as
on September 29, 2006.
o Impact cost of the S&P CNX Nifty for a portfolio size of Rs.5 million is
0.06%
o S&P CNX Nifty is professionally maintained and is ideal for derivatives
trading. It is quoted using the symbol NSEI.

It is calculated as a weighted average, so changes in the share price of larger companies

have more effect. The base is defined as 1000 at the price level of November 3, 1995, at
which time the total capitalisation was Rs.2,060,000 million. As on 3rd January 2007,
Index's value is 4007.40

Criteria for inclusion

• Average market capitalisation of Rs.5,000 million or more during the last six
months.
• Liquidity: Cost of transaction (impact cost) of less than 0.75% for more than 90%
of trades, over six months.
• At least 12% floating stock (not held by promoters of the company or their
associates).

The Nifty has crossed 4500 as a record markS

Innovations
NSE has remained in the forefront of modernization of India's capital and financial
markets, and its pioneering efforts include:

• Being the first national, anonymous, electronic limit order book (LOB) exchange
to trade securities in India. Since the success of the NSE, existent market and new
market structures have followed the "NSE" model.
• Setting up the first clearing corporation "National Securities Clearing Corporation
Ltd." in India. NSCCL was a landmark in providing novation on all spot equity
market (and later, derivatives market) trades in India.
• Co-promoting and setting up of National Securities Depository Limited, first
depository in India[4].
• Setting up of S&P CNX Nifty.
• NSE pioneered commencement of Internet Trading in February 2000, which led
to the wide popularization of the NSE in the broker community.
• Being the first exchange that, in 1996, proposed exchange traded derivatives,
particularly on an equity index, in India. After four years of policy and regulatory
debate and formulation, the NSE was permitted to start trading equity derivatives
three days after the BSE.
• Being the first exchange to trade ETFs (exchange traded funds) in India.
• NSE has also launched the NSE-CNBC-TV18 media centre in association with
CNBC-TV18, a leading business news channel in India.

Markets
Currently, NSE has the following major segments of the capital market:

• Equity
• Futures and Options
• Retail Debt Market
• Wholesale Debt Market

Indices
NSE also set up as index services firm known as India Index Services & Products
Limited (IISL) and has launched several stock indices, including:

• S&P CNX Nifty

• CNX Nifty Junior
• CNX 100 (= S&P CNX Nifty + CNX Nifty Junior)
• S&P CNX 500 (= CNX 100 + 400 major players across 72 industries)
• CNX Midcap (introduced on 18 July 2005 replacing CNX Midcap 200)
 Certifications
NSE also conducts online examination and awards certification, under its programmes of
NSE's Certification in Finanacial Markets (NCFM)[5]. Currently, certifications are
available in 9 modules, covering different sectors of financial and capital markets.
Branches of the NSE are located throughout India. vikas

Nifty components
This is a chart of companies listed in the S&P CNX Nifty index by market capitalisation
in Rs. Crores, Days weightage, P/E as of 4 January 2005.

Market Days
Rank Company P/E
Capitalisation weightage
— Total 20,04,213 100.00 21.57
1 Oil and Natural Gas Corporation Limited 1,86,619 9.31 12.2
2 Reliance industries Limited 1,79,003 8.93 18.8
3 Infosys Technologies Ltd 1,28,294 6.40 41.7
4 Tata Consultancy Services Ltd 1,25,275 6.25 35.6
5 Bharti Airtel Ltd 1,21,443 6.06 43.5
6 Reliance Communications Ltd 96,649 4.82 47.1
7 Wipro Ltd 89,296 4.46 36.0
8 ICICI Bank Ltd. 79,950 3.99 28.5
9 State Bank of India Ltd. 66,569 3.32 16.8
10 ITC Ltd. 65,955 3.29 27.1

CNX Nifty Junior

The CNX Nifty Junior is an index for companies on the National Stock Exchange of
India. It consists of 50 companies representing approximately 10% of the traded value of
all stocks on the National Stock Exchange of India. The CNX Nifty Junior is owned and
operated by India Index Services and Products Ltd. It is quoted using the symbol
NSMIDCP.

The CNX Nifty Junior and the S&P CNX Nifty represent the 100 most liquid
commodities traded on the National Stock Exchange of India. Together, they form a
disjoint set; that is to say, no one company can be listed on both indices simultaneously.

Market Capitalisation
This is a chart of companies listed in the CNX Nifty Junior index by market capitalisation
as of 29 April 2006 with figures in millions of Indian Rupees.

Rank Company Market Capitalisation

— Total 2,941,930
1 Sterlite Industries 318,910
2 Siemens 192,130
3 Reliance Capital 116,020
4 Container Corporation 115,200
5 Jaiprakash Associates 109,060
6 Bharat Electronics 106,810
7 Canara Bank 104,220
8 Bharat Forge 97,960
9 Axis Bank 96,940
10 Kotak Mahindra Bank 96,160

Market capitalization
Market capitalization, or market cap, is a measurement of corporate or economic size
equal to the stock price times the number of shares outstanding of a public company. As
owning stock represents owning the company, including all its assets, capitalization
represents the public opinion of a company's net worth and is a determining factor in
stock valuation. Likewise, the capitalization of stock markets or economic regions may
be compared to other economic indicators. The global market capitalization was $51.225
trillion in March 2007 [1], indicating a dominant force in the global economy.

Contents
• 1 Valuation
• 2 Categorization of companies by capitalization
• 3 See also
• 4 References

• 5 External links

Valuation

Stock market capitalisation in 2005

Market capitalization represents the public consensus on the value of a company. A
corporation, including all of its assets, may be freely bought and sold through purchases
and sales of stock, which will determine the price of the company's shares. Its market
capitalization is this share price multiplied by the number of shares in issue, providing a
total value for the company's shares and thus for the company as a whole.

Many companies have a dominant shareholder, typically a government or a family. Most

stockmarket indices (DOW, S&P500, BSE, FTSE, DAX, Nikkei, MSCI) adjust for these
by working on a "free float" basis, ie the market cap is the value of the publicly tradable
part of the company.

Note that market capitalization is a market estimate of a company's value, based on

perceived future prospects, economic and monetary conditions, and therefore largely
independent of a company's history. Stock prices can also be moved by speculation about
changes in expectations about profits or about mergers and acquisitions.

It is possible for stock markets to get caught up in an economic bubble, like the "dotcom
mania", and excess speculation, like any asset class such as gold or real estate. In such
events, it is normal for companies to become valued on past momentum extrapolated into
the future plus justified by a convincing story as well as success, until it goes wrong and
the world mean-reverts, causing significant losses. Conversely, stock markets will usually
be the primary transmission mechanism for most of the pleasant surprises that occur in
the world's economy.

Capitalized value is a synonomous phrase of market capitalization.

Categorization of companies by capitalization

Smaller companies tend to be riskier investments and have higher growth potential. The
order of magnitude of the capitalization may be used as investor's shorthand for the
associated risk, and serves as a handy way to classify companies in general:

• Micro-Cap: capitalization below $250 million.

• Small-Cap: capitalization between approximately $250 million and $1 billion
• Mid-Cap: capitalization between approximately $1 billion and $10 billion
• Large-Cap or blue chip: capitalization over approximately $10 billion

Market liquidity
Market liquidity is a business, economics or investment term that refers to an asset's
ability to be easily converted through an act of buying or selling without causing a
significant movement in the price and with minimum loss of value. An act of exchange of
a less liquid asset with a more liquid asset is called liquidation. Liquidity also refers
both to that quality of a business which enables it to meet its payment obligations, in
terms of possessing sufficient liquid assets; and to such assets themselves.

Contents
• 1 Summary
• 2 Futures
• 3 Banking
• 4 Business

• 5 See also

Summary
A liquid asset has some or more of the following features. It can be sold (1) rapidly, (2)
with minimum loss of value, (3) anytime within market hours. The essential characteristic
of a liquid market is that there are ready and willing buyers and sellers at all times. An
elegant definition of liquidity is also the probability that the next trade is executed at a
price equal to the last one. A market may be considered deeply liquid if there are ready
and willing buyers and sellers in large quantities. This is related to a market depth, where
sometimes orders cannot strongly influence prices.

The liquidity of a product can be measured as how often it is bought and sold; this is
known as volume. Often investments in liquid markets such as the stock exchange or
futures markets are considered to be more liquid than investments such as real estate,
based on their ability to be converted quickly. Some assets with liquid secondary markets
may be more advantageous to own, are willing to pay a higher price for the asset than for
comparable assets without a liquid secondary market. The liquidity discount is the
reduced promised yield or expected return for such assets, like the difference between
newly issued U.S. Treasury bonds compared to off-the-run Treasuries with the same term
remaining until maturity. Buyers know that other investors are not willing to buy off-the-
run so the newly issued bonds have a lower yield and higher price.

Speculators and market makers are key contributors to the liquidity of a market, or asset.
Speculators and market makers are individuals or institutions that seek to profit from
anticipated increases or decreases in a particular market price. By doing this, they provide
the capital needed to facilitate the liquidity. The risk of illiquidity need not apply only to
individual investments: whole portfolios are subject to market risk. Financial institutions
and asset managers that oversee portfolios are subject to what is called "structural" and
"contingent" liquidity risk. Structural liquidity risk, sometimes called funding liquidity
risk, is the risk associated with funding asset portfolios in the normal course of business.
Contingent liquidity risk is the risk associated with finding additional funds or replacing
maturing liabilities under potential, future stressed market conditions. When a central
bank tries to influence the liquidity (supply) of money, this process is known as open
market operations.
Futures
In the futures markets, there is no assurance that a liquid market may exist for offsetting a
commodity contract at all times. Some futures contracts and specific delivery months
tend to have increasingly more trading activity and have higher liquidity than others. The
most useful indicators of liquidity for these contracts are the trading volume and open
interest.

There is also "dark liquidity", referring to transactions that occur off-exchange and are
therefore not visible to investors until after the transaction is complete. It does not
contribute to public price discovery.[1]

Banking
In banking, liquidity is the ability to meet obligations when they come due without
incurring unacceptable losses. Managing liquidity is a daily process requiring bankers to
monitor and project cash flows to ensure adequate liquidity is maintained. Maintaining a
balance between short-term assets and short-term liabilities is critical. Deposit accounts
represent the primary funding (liabilities) in traditional commercial banks, and the loan
portfolio represents the primary asset. The investment portfolio represents a smaller
portion of assets, and serves as the primary source of liquidity. Investment securities can
be liquidated to satisfy deposit withdrawals and increased loan demand. Banks have
several additional options for generating liquidity, such as selling loans, borrowing from
other banks, borrowing from a Central bank, such as the US Federal Reserve bank, and
raising additional capital. In a worst case scenario, depositors may demand their funds
when the bank is unable to generate adequate cash without incurring substantial financial
losses. In severe cases, this may result in a bank run. Most banks are subject to legally-
mandated reserve requirements intended to help banks avoid liquidity crises.

Business
In business, the term refers to a company's ability to meet its obligation when and in the
event they fall due. If a firm is unable to meet its obligation in time, the company is in
danger of insolvency. Therefore, heavy weight is put in finance planning by the
controlling staff in order to register all potential shortages in funds. If there is a shortage,
the Treasury will be informed in order to be prepared to raise capital for the next business
period. If a shortage of funds is registered too late and the funds are insufficient, banks
may reject lending a company capital, and in consequence bankruptcy might be
inescapeable.

In business, merchants often have liquidation sales, in which inventories are sold at
discount to raise cash or to get rid of inventory more quickly.

• Accounting liquidity
P/E ratio
The P/E ratio (price-to-earnings ratio) of a stock (also called its "earnings multiple", or
simply "multiple", "P/E", or "PE") is a measure of the price paid for a share relative to the
income or profit earned by the firm per share. A higher P/E ratio means that investors are
paying more for each unit of income. It is a valuation ratio included in other financial
ratios. The reciprocal of the P/E ratio is known as the earnings yield.

The price per share (numerator) is the market price of a single share of the stock. The
earnings per share (denominator) is the net income of the company for the most recent 12
month period, divided by number of shares outstanding. The earnings per share (EPS)
used can also be the "diluted EPS" or the "comprehensive EPS".

For example, if stock A is trading at $24 and the earnings per share for the most recent 12
month period is $3, then stock A has a P/E ratio of 24/3 or 8. Put another way, the
purchaser of stock A is paying $8 for every dollar of earnings. Companies with losses
(negative earnings) or no profit have an undefined P/E ratio (usually shown as Not
applicable or "N/A"); sometimes, however, a negative P/E ratio may be shown.

By relating price and earnings per share for a company, one can analyze the market's
stock valuation of a company and its shares relative to the income the company is
actually generating. Investors can use the P/E ratio to compare the value of stocks: if one
stock has a P/E twice that of another stock, all things being equal, it is a less attractive
investment. Companies are rarely equal, however, and comparisons between industries,
countries, and time periods may be misleading.

Contents
• 1 Determining share prices
• 2 Interpretation
• 3 The Market P/E
• 4 An example
• 5 Inputs
o 5.1 Accuracy and context
o 5.2 Historical vs. Projected Earnings
• 6 The P/E Concept in Business Culture
• 7 Dividend Yield
• 8 Earnings yield
• 9 Related concepts
• 10 See also
 • 11 External links

o 11.1 Data

Determining share prices

Share prices in a publicly traded company are determined by market supply and demand,
and thus depend upon the expectations of buyers and sellers. Among these are:

• The company's future and recent performance, including potential growth;

• Perceived risk, including risk due to high leverage;
• Prospects for companies of this type, the "market sector".

By dividing the price of one share in a company by the profits earned by the company per
share, you arrive at the P/E ratio. If earnings move up in line with share prices (or vice
versa) the ratio stays the same. But if stock prices gain in value and earnings remain the
same or go down, the P/E rises.

The price used to calculate a P/E ratio is usually the most recent price. The earnings
figure used is the most recently available, although this figure may be out of date and
may not necessarily reflect the current position of the company. This is often referred to
as a trailing P/E, because it involves taking earnings from the last four quarters; the
'forward P/E' (or current price compared to estimated earnings going forward twelve
months) is also used.

Interpretation
The average U.S. equity P/E ratio from 1900 to 2005 is 14 (or 16, depending on whether
the geometric mean or the arithmetic mean is used to average). An oversimplified
interpretation would conclude that it takes about 14 years to recoup the price paid for a
stock [not including any income from the reinvestment of dividends].

Normally, stocks with high earning growth are traded at higher P/E values. For example,
stock A may be expected to earn $6 per share the next year. Then the forward P/E ratio is
$24/6 = 4. So, you are paying $4 for every one dollar of earnings, which makes the stock
more attractive than it was the previous year.

The P/E ratio implicitly incorporates the perceived riskiness of a given company's future
earnings. For a stock purchaser, this risk includes the possibility of bankruptcy. For
companies with high leverage (that is, high levels of debt), the risk of bankruptcy will be
higher than for other companies. Assuming the effect of leverage is positive, the earnings
for a highly-leveraged company will also be higher. In principle, the P/E ratio
incorporates this information, and different P/E ratios may reflect the structure of the
balance sheet.
Variations on the standard trailing and forward P/E ratios are common. Generally,
alternative P/E measures substitute different measures of earnings, such as rolling
averages over longer periods of time (to "smooth" volatile earnings, for example), or
"corrected" earnings figures that exclude certain extraordinary events or one-off gains or
losses. The definitions may not be standardized.

Various interpretations of a particular P/E ratio are possible, and the historical table below
is just indicative and cannot be a guide, as current P/E ratios should be compared to
current real interest rates:

A company with no earnings has an undefined P/E ratio. By convention,

companies with losses (negative earnings) are usually treated as having an
N/A
undefined P/E ratio, although a negative P/E ratio can be mathematically
determined.
Either the stock is undervalued or the company's earnings are thought to be in
0–10
decline. Alternatively, current earnings may be substantially above historic trends.
10–17 For many companies a P/E ratio in this range may be considered fair value.
Either the stock is overvalued or the company's earnings have increased since the
17–25 last earnings figure was published. The stock may also be a growth stock with
earnings expected to increase substantially in future.
A company whose shares have a very high P/E may have high expected future
25+
growth in earnings or the stock may be the subject of a speculative bubble.

It is usually not enough to look at the P/E ratio of one company and determine its status.
Usually, an analyst will look at a company's P/E ratio compared to the industry the
company is in, the sector the company is in, as well as the overall market (for example
the S&P 500 if it is listed in a US exchange). Sites such as Reuters offer these
comparisons in one table. Example of RHAT Often, comparisons will also be made
between quarterly and annual data. Only after a comparison with the industry, sector, and
market can an analyst determine whether a P/E ratio is high or low with the above
mentioned distinctions (i.e., undervaluation, over valuation, fair valuation, etc).

The Market P/E

To calculate the P/E ratio of a market index such as the S&P 500, it is not accurate to take
the "simple average" of the P/Es of all stock constituents. The preferred and accurate
method is to calculate the weighted average. In this case, each stock's underlying market
cap (price multiplied by number of shares in issue) is summed to give the total value in
terms of market capitalization for the whole market index. The same method is computed
for each stock's underlying net earnings (earnings per share multiplied by number of
shares in issue). In this case, the total of all net earnings is computed and this gives the
total earnings for the whole market index. The final stage is to divide the total market
capitalization by the total earnings to give the market P/E ratio. The reason for using the
weighted average method rather than 'simple' average can best be described by the fact
that the smaller constituents have less of an impact on the overall market index. For
example, if a market index is composed of companies X and Y, both of which have the
same P/E ratio (which causes the market index to have the same ratio as well) but X has a
9 times greater market cap than Y, then a percentage drop in earnings per share in Y
should yield a much smaller affect in the market index than the same percentage drop in
earnings per share in X.

An example
An easy and perhaps intuitive way to understand the concept is with an analogy:

Let's say I offer you a privilege to collect a dollar every year from me forever.
How much are you willing to pay for that privilege now? Let's say you are only
willing to pay me 50 cents, because you may think that paying for that privilege
coming from me could be risky. On the other hand, suppose that the offer came
from Bill Gates, how much would you be willing to pay him? Perhaps, your
answer would be at least more than 50 cents, let's say, $20. Well, the price
earnings ratio or sometimes known as earnings multiple is nothing more than the
number of dollars the market is willing to pay for a privilege to be able to earn a
dollar forever in perpetuity. Bill Gates' P/E ratio is 20 and my P/E ratio is 0.5.
Now view it this way: The P/E ratio also tells you how long it will take before
you can recover your investment (ignoring of course the time value of money).
Had you invested in Bill Gates, it would have taken you at least 20 years, while
investing in me could have taken you less than a year, that is, only 6 months.

If a stock has a relatively high P/E ratio, let's say, 100 (which Google exceeded during the
summer of 2005), what does this tell you? The answer is that it depends. A few reasons a
stock might have a high P/E ratio are:

• The market expects the earnings to rise rapidly in the future. For example a gold
mining company which has just begun to mine may not have made any money yet
but next quarter it will most likely find the gold and make a lot of money. The
same applies to pharmaceutical companies — often a large amount of their
revenue comes from their best few patented products, so when a promising new
product is approved, investors may buy up the stock.
• The company was previously making a lot of money, but in the last year or
quarter it had a special one time expense (called a "charge"), which lowered the
earnings significantly. Stockholders, understanding (possibly incorrectly) that this
was a one time issue, will still buy stock at the same price as before, and only sell
it at least at that same price.
• Hype for the stock has caused people to buy the stock for a higher price than they
normally would. This is called a bubble. One of the most important uses for the
P/E metric is to decide whether a stock is undergoing a bubble or an anti-bubble
by comparing its P/E to other similar companies. Historically, bubbles have been
followed by crashes. As such, prudent investors try to stay out of them.
• The company has some sort of business advantage which seems to ensure that it
will continue making money for a long time with very little risk. Thus investors
 are willing to buy the stock even at a high price for the peace of mind that they
will not lose their money.
• A large amount of money has been inserted into the stock market, out of
proportion with the growth of companies across the same time period. Since there
are only a limited amount of stocks to buy, supply and demand dictate that the
prices of stocks must go up. This factor can make comparing P/E ratios over time
difficult.
• Likewise, a specific stock may have a temporarily high price when, for whatever
reason, there has been high demand for it. This demand may have nothing to do
with the company itself, but may rather relate to, for example, an institutional
investor trying to diversify out risk.

Inputs
Accuracy and context

In practice, decisions must be made as to how to exactly specify the inputs used in the
calculations.

• Does the current market price accurately value the organization?

• How is income to be calculated and for what periods? How do we calculate total
capitalization?
• Can these values be trusted?
• What are the revenue and earnings growth prospects over the time frame one is
investing in?
• Was there special one time charges which artificially lowered (or artificially
raised) the earnings used in the calculation, and did those charges cause a drop in
stock price or were they ignored?
• Were these charges truly one-time, or is the company trying to manipulate us into
thinking so?
• What kind of P/E ratios is the market giving to similar companies, and also the
P/E ratio of the entire market?

Historical vs. Projected Earnings

A distinction has to be made between the fundamental (or intrinsic) P/E and the way we
actually compute P/Es. The fundamental or intrinsic P/E examines earnings forecasts.
That is what was done in the analogy above. In reality, we actually compute P/Es using
the latest 12 month corporate earnings. Using past earnings introduces a temporal
mismatch, but it is felt that having this mismatch is better than using future earnings,
since future earnings estimates are notoriously inaccurate and susceptible to deliberate
manipulation.

On the other hand, just because a stock is trading at a low fundamental P/E is not an
indicator that the stock is undervalued. A stock may be trading at a low P/E because the
investors are less optimistic about the future earnings from the stock. Thus, one way to
get a fair comparison between stocks is to use their primary P/E. This primary P/E is
based on the earnings projections made for the next years to which a discount calculation
is applied.

The P/E Concept in Business Culture

The P/E ratio of a company is a significant focus for management in many companies
and industries. This is because management is primarily paid with their company's stock
(a form of payment that is supposed to align the interests of management with the
interests of other stock holders), in order to increase the stock price. The stock price can
increase in one of two ways: either through improved earnings or through an improved
multiple that the market assigns to those earnings. As mentioned earlier, a higher P/E
ratio is the result of a sustainable advantage that allows a company to grow earnings over
time (i.e., investors are paying for their peace of mind). Efforts by management to
convince investors that their companies do have a sustainable advantage have had
profound effects on business:

• The primary motivation for building conglomerates is to diversify earnings so that

they go up steadily over time[citation needed].
• The choice of businesses which are enhanced or closed down or sold within these
conglomerates is often made based on their perceived volatility, regardless of the
absolute level of profits or profit margins[citation needed].
• One of the main genres of financial fraud, "slush fund accounting" (hiding excess
earnings in good years to cover for losses in lean years), is designed to create the
image that the company always slowly but steadily increases profits, with the goal
to increase the P/E ratio.

These and many other actions used by companies to structure themselves to be perceived
as commanding a higher P/E ratio can seem counterintuitive to some, because while they
may decrease the absolute level of profits they are designed to increase the stock price.
Thus, in this situation, maximizing the stock price acts as a perverse incentive.

Dividend Yield
Publicly traded companies often make periodic quarterly or yearly cash payments to their
owners, the shareholders, in direct proportion to the number of shares held. According to
US law, such payments can only be made out of current earnings or out of reserves
(earnings retained from previous years). The company decides on the total payment and
this is divided by the number of shares. The resulting dividend is an amount of cash per
share. The dividend yield is the dividend paid in the last accounting year divided by the
current share price.

If a stock paid out $5 per share in cash dividends to its shareholders last year, and its
price is currently $50, then it has a dividend yield of 10%.
Historically, at severely high P/E ratios (such as over 100x), a stock has NO (0.0%) or
negligible dividend yield. With a P/E ratio over 100x, and supposing a portion of earnings
is paid as dividend, it would take over a century to earn back the purchase price. Such
stocks are extremely overvalued, unless a huge growth of earnings in the next years is
expected.

Earnings yield
The reverse (or reciprocal) of the P/E is the E/P, also known as the earnings yield. The
earnings yield is quoted as a percentage, and is useful in comparing a stock, sector, or the
market's valuation relative to bonds.

The earnings yield is also the cost to a publicly traded company of raising expansion
capital through the issuance of stock.

Stock Market v d e
Types of Stocks
Stock | Common stock | Preferred stock | Outstanding stock | Treasury stock
Trading Stock
Participants: Market maker
Exchanges: Stock exchange | List of stock exchanges | New York Stock Exchange | NASDAQ
Toronto Stock Exchange | London Stock Exchange | Euronext | Frankfurt Stock
Exchange
Tokyo Stock Exchange | Hong Kong Stock Exchange | Australian Securities Exchange
Warsaw Stock Exchange | Botswana Stock Exchange | Zimbabwe Stock Exchange
Palestine Securities Exchange | Kyrgyz Stock Exchange | Chittagong Stock Exchange
Stock Valuation
Trading Theories: Dow Theory | Elliott Wave Theory | Fundamental analysis | Technical analysis
Mark Twain effect | January effect | Efficient market hypothesis
Dividend yield | Gordon model | Income per share | Book value | Earnings yield | Beta
Stock Pricing:
coefficient
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since June 2007 | Financial ratios

Consumer spending
Consumer demand or consumption is also known as personal consumption expenditure.
It is the largest part of aggregate demand or effective demand at the macroeconomic
level.
There are two variants of consumption in the aggregate demand model, including induced
consumption and autonomous consumption.

Gross domestic product

This article is about GDP in the context of economics. For other uses, see GDP
(disambiguation).

Nominal GDP per person (capita) in 2006.

IMF 2005 figures of total nominal GDP (top) compared to PPP-adjusted GDP (bottom).

A region's gross domestic product, or GDP, is one of the ways for measuring the size of
its economy. The GDP of a country is defined as the market value of all final goods and
services produced within a country in a given period of time. It is also considered the sum
of value added at every stage of production of all final goods and services produced
within a country in a given period of time. Until the 1980s the term GNP or gross
national product was used in the United States. The two terms GDP and GNP are almost
identical - and yet entirely different; GDP (or GDI - Gross Domestic Income) being
concerned with the region in which income is generated and GNP (or GNI - Gross
National Income) being a measure of the accrual of income to a region. The most
common approach to measuring and understanding GDP is the expenditure method:

GDP = consumption + investment + (government spending) + (exports −

imports)

"Gross" means depreciation of capital stock is not included. With depreciation, with net
investment instead of gross investment, it is the net domestic product. Consumption and
investment in this equation are the expenditure on final goods and services. The exports
minus imports part of the equation (often called cumulative exports) then adjusts this by
subtracting the part of this expenditure not produced domestically (the imports), and
adding back in domestic area (the exports).
Economists (since Keynes) have preferred to split the general consumption term into two
parts; private consumption, and public sector (or government) spending. Two advantages
of dividing total consumption this way in theoretical macroeconomics are:

• Private consumption is a central concern of welfare economics. The private

investment and trade portions of the economy are ultimately directed (in
mainstream economic models) to increases in long-term private consumption.
• If separated from endogenous private consumption, government consumption
can be treated as exogenous, so that different government spending levels can be
considered within a meaningful macroeconomic framework.

Record derivatives turnover at NSE

Our Bureau

MUMBAI, July 12

THE National Stock Exchange (NSE) today recorded the highest volume of turnover
in the derivative segment since inception. The total value of the contracts traded at
the NSE (Nifty futures, options and stock options put together) was Rs 128.15 crore.

Amongst these, the S&P CNX Nifty futures registered the highest volume of turnover
at Rs 86.71 crore with 3,966 contracts being traded.

According to the exchange, the near month (contract expiring on July 26, 2001)
futures contract witnessed a volume of 2,886 contracts with a value of about Rs 63
crore.

The S&P CNX Nifty options recorded 831 contracts with a notional value of Rs 18.04
crore. The most active S&P CNX Nifty options contract was near month at-the-
money, 1,100 call option contracts with 187 contracts being traded with an average
premium of Rs 11.
Options on individual securities recorded 1,050 contracts with a notional value of Rs
23.40 crore. The near month, in-the-money, 170 call option on Satyam Computers
was most actively traded today with 104 contracts being traded at an average
premium of Rs 20.

The next most active option on individual security contract was in L&T. The near
month, in-the-money 220 call option on L&T traded 71 contracts at an average
premium of Rs 10.

National Stock Exchange of India (NSE) is India's largest Stock Exchange & World's
third largest Stock Exchange in terms of transactions. Located in Mumbai, NSE was
promoted by leading Financial Institutions at the behest of the Government of India, and
was incorporated in November 1992 as a tax-paying company. In April 1993, NSE was
recognized as a Stock exchange under the Securities Contracts (Regulation) Act-1956.
NSE commenced operations in the Wholesale Debt Market (WDM) segment in June
1994. Capital Market (Equities) segment of the NSE commenced operations in November
1994, while operations in the Derivatives segment commenced in June 2000. NSE has
played a catalytic role in reforming Indian securities market in terms of microstructure,
market practices and trading volumes. NSE has set up its trading system as a nation-
wide, fully automated screen based trading system. It has written for itself the mandate to
create World-class Stock Exchange and use it as an instrument of change for the industry
as a whole through competitive pressure. NSE is set up on a demutualised model wherein
the ownership, management and trading rights are in the hands of three different sets of
people. This has completely eliminated any conflict of interest.

NSE was set up with the objectives of:

• Establishing nationwide trading facility for all types of securities

• Ensuring equal access to investors all over the country through an appropriate
telecommunication network
• Providing fair, efficient & transparent securities market using electronic trading
system
• Enabling shorter settlement cycles and book entry settlements
 • Meeting International benchmarks and standards

Within a very short span of time, NSE has been able to achieve its objectives for which it
was set up. Indian Capital Markets are a far cry from what they were 12 years back in
terms of market practices, infrastructure, technology, risk management, clearing and
settlement and investor service. To ensure continuity of business, NSE has built a full
fledged BCP site operational for last 7 years.

NSE's markets

NSE provides a fully automated screen-based trading system with national reach in the
following major market segments:-

• Equity OR Capital Markets {NSE's market share is over 65%}

• Futures & Options OR Derivatives Market {NSE's market share over 99.5%}
• Wholesale Debt Market (WDM)
• Mutual Funds (MF)
• Initial Public Offerings (IPO)

What are the IT initiatives of NSE in the last one year?

NSE believes that technology shall continue to provide necessary impetus for any
organisation to retain its competitive edge, ensure timeliness & satisfaction in customer
service. Being fully dependant on Information Technology, NSE has stressed on
innovation and sustained investment in technology on a continual basis to ensure
customer satisfaction, improvement in services which automatically helps in sustaining
business and remain ahead of competition. As a policy, NSE looks to improve the quality
of Services to its customers. Projects are not initiated based on a business model to reap
profits but from a strategic perspective of better productivity, Value-adds & features,
improving efficiency, reducing operational costs, compliance, operational transparency
etc for the customers, investors and to the entire Indian Securities Industry. Some of the
projects taken by NSE last year are as follows:-

1. Trading System Capacity enhancement

2. Re-engineering of Online Position Monitoring (OPMS)
3. Augmentation of Data Warehouse (DWH)
4. STP Central Hub

What was the objective, business benefits that the company derived and
beneficiaries of the implementation of Trading System Capacity enhancement?

Project Objective
NSE's Capital Market Trading system was operational on two machine split architecture
using Fault Tolerant mainframes and geared to handle 3 million trades. However, the CM
segment had started to experience trades nearing 3 Million trades which form a threshold.
Based on the trends & expected volumes, growth in the medium term is more than thrice
the current trading volume, i.e. about 10 Million transactions per day. However with the
then existing 2-machine split architecture, it was required to improve the trading system
transaction handling capacity. The 3-machine split architecture project was thus taken up
to enhance the load handling capacity of the system by introducing a 3-way split
Hardware, Application optimisation and improving the processes for achieving market
volume of around 6 million transactions per day.

Project was completed as per schedule & is currently operational since last 1 year.

Business Benefits

1. System scaled on 3 machines with distribution of users and securities with

complete transparency to market participants.
2. System witnessed 3 million trades with faster response time to members at
significantly lower system resource utilisation level.
3. Scalability to handle higher volumes (3 million to 6 million transactions per day).

Beneficiaries
Trading Members have experienced a faster response time. The trading system is able to
handle higher volume of transactions which translates into higher turnover. It therefore
directly translates into more opportunities and growth for the Entire Indian Securities
market.

What was the objective, business benefits that the company derived and
beneficiaries of the implementation of re-engineering of Online Position Monitoring
(OPMS)?

Project Objective
OPMS is On-line Position Monitoring and Risk Management system for the Capital
Market segment of the National Stock Exchange of India Limited. It tracks positions of
trading members from Turnover and Exposure limits with a view of identifying and
preventing potential settlement related issues. The positions are monitored on an on-line
basis and the system provides for auto disablement of the violating member on the
trading system. Based on the volumes, it is expected that the current trading levels of
about 3 million trades per day may rise to the new heights of 10 million trades per day in
the near future. It was therefore necessary to initiate was to reengineer OPMS system
without imposing any major cost associated with architectural overhauling. Another key
objective was to scale the violation detection mechanism by a mammoth factor from
around 300 violation checks per second to handle more than 4000 violations per second.

Other major objectives and the goals include:

• Real-time position computation and violation detection

• Ability to handle high load of over one million client positions
• Management of information for positions & risk values about each trading
member
• Information structure based on a tree of security, settlement, trading member
 • Handle on-line collateral and securities early pay-in
• Total fault tolerance with minimum downtime
• Achieve 4000 violation checks per second

Business Benefits

1. Effective and efficient Risk Management- Violation turnover reduced from few
seconds to few milliseconds & 99.96% trades processed for Risk Management
within a second of occurrence.
2. Better utilisation of Resources- Peak capacity of trades handling capacity
enhanced to 10 million trades & Average CPU utilisation reduced from 70% to
20%.
3. Linearly scalable

Beneficiaries
Trading Members risk management has significantly improved. Trading members have
benefited due to this initiative.

What was the objective, business benefits that the company derived and
beneficiaries of the implementation Augmentation of Data Warehouse (DWH)?

Project Objective
NSE has a matured data warehouse application extensively used for analysis, reporting
and investigative purposes. The project was to enhance and upgrade existing data
warehouse infrastructure in terms of:-

• Migrating to a higher capacity server and storage hardware

• Migrating database from Oracle 8 to Oracle 9i
• Upgrade existing ETL solution consisting of a separate extraction solution and
transformation cum loading solution into a complete and unified ETL tool

Business Benefits

1. Response time & query performance improved dramatically by about 100%.

2. Extraction and loading time has reduced by almost 8-9 times.
3. Timely, efficient reporting. Reduced lead time in providing data to Regulator.
4. New features of Oracle 9i like Ranking, enhanced analytic functions have
contributed enormously to efficiency aspect of the data warehouse usage.

Beneficiaries
Benefit accrued to NSE as an organisation due to the extensive usage of DWH.

What was the objective, business benefits that the company derived and
beneficiaries of the implementation STP Central Hub?
Project Objective
During a typical day at an institutional fund house, details of trade confirmations
executed in the day are sent out to the Custodian for effecting trade settlements. The
Custodian also receives details of the executed trade from the broker of the fund house,
for cross-verification of the trade data. Upon verification, if it is found that the trade
details do not match the instruction documents sent across by the fund house and the
broker there is a delay in effecting such settlements. This is a global phenomenon that is a
concern for all the major financial institutions. Studies have shown that around 15% of
global trade failures result from unmatched trade data, which in monetary terms is
upwards of Billions of Dollars, a steep price pay for the lack of an efficient processing
framework. Straight Through Processing (STP) framework seeks to provide seamless
data flow both within the enterprise as well as across the market without any manual
intervention using ISO 15022 messaging standards.

In India, inspite of SEBI making STP mandatory, market participants were not able to
fully adapt the STP framework into their operations as the STP services provided by
various providers were not interoperable. This meant that messages destined for market
participants registered across the service providers could not be achieved. One of the
options was to ensure that each of the STP provider "talked" to other STP providers, but
this meant a mathematical explosion in terms of number of interconnects in case of
increasing number of service providers.

Recognising that the success of the STP is crucial to make a move towards T+1
settlement cycle, NSE took up the challenge of setting up a Central Hub to resolve inter-
operability amongst various STP Service Providers. After developing the application
software, the STP Central Hub was put for operational testing from end of March 2004 to
route the messages between Service Providers. STP Central Hub has ensured seamless
operations of message processing. After the initial testing and stabilization period, SEBI
has mandated use of STP system for all institutional trades. SEBI endeavoured to shorten
the settlement cycle and has been successful in reducing the same from T+5 to T+2. It has
now set a target for achieving T+1 settlement in Indian Securities Market. T+1 settlement
cycle has not been achieved anywhere in the world and India is the first country to
successfully implement STP effectively for all the market intermediaries.

NSE through its strength in technology innovations has made it possible for the
integration of all STP service providers using heterogeneous protocols within their own
system so as to provide the necessary impetus to the process

Business Benefits

1. Improved efficiency, reduction of manual activities leading to higher accuracy of

trade execution and settlement.
2. Reduced operational risk by automating the process from execution through to
settlement.
3. Reduction in operational cost by sending data electronically.
 4. Transparency & improved customer service with detailed reports about delivery
and failure of messages are available instantaneously, on an on-line basis.
5. Reduced settlement cycle to facilitate T+1 settlement.

Beneficiaries
Entire Indian Securities Industry has been the beneficiary of the STP Central Hub
initiative. It is the only STP Central Hub operational since the last few years. This move
has helped for faster clearing and settlement in Indian Securities Industry and help
achieve 'T+1' environment in India. India's profile in International markets was enhanced
which will help in attracting further foreign investments.
 Home > F&O > Products >
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An option
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obligatio
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is a cont
buyer re
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obligatio
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premium
the optio
buys an
option. A
option is

NSE intro
June 4, 2
European
based on
CNX Nift
indices)
• Cont
• Tradi

Contract Specifica

Security descripto
The security descript

Market type : N
Instrument Type : O
Underlying : NIFTY
Expiry date : Date o
 S&P CNX Nifty

Particulars Details
Index - Name of Index S&P CNX NIFTY
Base Year 1995
Base Value 1000
Number of Scrips 50
Index construction
Nature of Index
Index P/E Daily P/E of S&P CNX NIFTY
Market Coverage
Volume coverage
Calculation frequency On-line
Calculated by India Index Services & Products Ltd. (IISL)
List of vendors for dissemination of information Reuters, Bloomberg, Thomson , Spider
Industry-wise Market Capitalisation, Weightage, Beta etc.
Annual dividend yield of the index
Historical price data of index movements
Types of products available on the Index Index Futures, Index Options
Top

Price Bands

There are no day minimum/maximum price ranges applicable in the derivatives segment. However, in order to
prevent erroneous order entry, operating ranges and day minimum/maximum ranges are kept as below:

1. For Index Futures: at 10% of the base price

2. For Index and Stock Options: Upper Operating Range + 99% of base price or Rs.20, whichever is higher;
Lower Operating Range Rs.0.05
3. For Futures on Individual Securities: at 20% of the base price

In view of this, orders placed at prices which are beyond the operating ranges would reach the Exchange as a
price freeze.

Price Bands

There are no day minimum/maximum price ranges applicable in the derivatives segment. However, in order to
prevent erroneous order entry, operating ranges and day minimum/maximum ranges are kept as below:

1. For Index Futures: at 10% of the base price

2. For Index and Stock Options: Upper Operating Range + 99% of base price or Rs.20, whichever is higher;
Lower Operating Range Rs.0.05
3. For Futures on Individual Securities: at 20% of the base price

In view of this, orders placed at prices which are beyond the operating ranges would reach the Exchange as a
price freeze.
CNXIT

Particulars Details
Index - Name of Index CNX IT Sector Index
Base Year 01-Jan-1996
Base Value 100 w.e.f. May 28, 2004
Number of Scrips 20
Index construction
Nature of Index
Index P/E Daily P/E of CNX IT
Approximately 10% of the total market
Market Coverage
capitalization
Volume coverage Approximately 27.50% of the total market volume
Calculation frequency Six seconds
Calculated by India Index Services & Products Ltd. (IISL)
List of vendors for dissemination of
Reuters, Bloomberg, Thomson , Spider
information
Industry-wise Market Capitalisation and Weightage
Annual dividend yield of the index
Historical price data of index movements
Types of products available on the Index Index Futures, Index Options
CNX IT Index CNX IT Watch

Information Technology (IT) industry has played a major role in the Indian economy during the last few years. A
number of large, profitable Indian companies today belong to the IT sector and a great deal of investment
interest is now focused on the IT sector. In order to have a good benchmark of the Indian IT sector, IISL has
developed the CNX IT sector index. CNX IT provides investors and market intermediaries with an appropriate
benchmark that captures the performance of the IT segment of the market.

Companies in this index are those that have more than 50% of their turnover from IT related activities like
software development, hardware manufacture, vending, support and maintenance.

The average total traded value for the last six months of CNX IT Index stocks is approximately 91% of the traded
value of the IT sector. CNX IT Index stocks represent about 96% of the total market capitalization of the IT sector
as on March 31, 2005.

The average total traded value for the last six months of all CNX IT Index constituents is approximately 14% of
the traded value of all stocks on the NSE. CNX IT Index constituents represent about 14% of the total market
capitalization as on March 31, 2005.

Methodology

The index is a market capitalisation weighted index with its base period being December 1995 and the base date
and base value being January 1, 1996 and 1,000 respectively.

The Base Value of the index is being revised from 1000 to 100 w.e.f. 28 May 2004.

Selection Criteria

Selection of the index set is based on the following criteria :

 1. Company's market capitalisation rank in the universe should be less than 500

2. Company's turnover rank in the universe should be less than 500

3. Company's trading frequency should be at least 90% in the last six months

4. Company should have a positive networth.

5. A company which comes out with a IPO will be eligible for inclusion in the index, if it fulfills the normal
eligibility criteria for the index for a 3 month period instead of a 6 month period.

List of CNX IT Index Stocks

CNX IT Futures

CNX IT Options

Details of past changes to CNX IT Index

BANK Nifty

Particulars Details
Index - Name of Index CNX BANK Index
Base Year 01-Jan-2000
Base Value 1000
Number of Scrips 12
Index construction
Nature of Index
Index P/E Daily P/E of BANK Nifty
79% of total mkt. cap of banking stock
Market Coverage
as on March 31, 2005
Volume coverage
Market Capitalization Rs. 135774.13 cr (As on May 26, 2005)
Calculation frequency Six seconds
Calculated by India Index Services & Products Ltd. (IISL)
Current index value 3593.55 (As on close of Jun 10, 2005)
52 week high / low 3931.55 / 2162.15
List of vendors for dissemination of information Reuters, Bloomberg, Thomson , Spider
Industry-wise Market Capitalisation and Weightage
Annual dividend yield of the index
Historical price data of index movements
Types of products available on the Index Index Futures, Index Options
CNX Bank Index BANK Nifty Watch

The Indian banking Industry has been undergoing major changes, reflecting a number of underlying
developments. Advancement in communication and information technology has facilitated growth in internet-
banking, ATM Network, Electronic transfer of funds and quick dissemination of information. Structural reforms in
the banking sector have improved the health of the banking sector. The reforms recently introduced include the
enactment of the Securitization Act to step up loan recoveries, establishment of asset reconstruction companies,
initiatives on improving recoveries from Non-performing Assets (NPAs) and change in the basis of income
recognition has raised transparency and efficiency in the banking system. Spurt in treasury income and
improvement in loan recoveries has helped Indian Banks to record better profitability. In order to have a good
benchmark of the Indian banking sector, India Index Service and Product Limited (IISL) has developed the CNX
Bank Index.

CNX Bank Index is an index comprised of the most liquid and large capitalised Indian Banking stocks. It provides
investors and market intermediaries with a benchmark that captures the capital market performance of Indian
Banks.The index will have 12 stocks from the banking sector which trade on the National Stock Exchange.

The average total traded value for the last six months of CNX Bank Index stocks is approximately 74% of the
traded value of the banking sector. CNX Bank Index stocks represent about 79% of the total market capitalization
of the banking sector as on March 31, 2005.

The average total traded value for the last six months of all the CNX Bank Index constituents is approximately
10% of the traded value of all stocks on the NSE. CNX Bank Index constituents represent about 9% of the total
market capitalization as on March 31, 2005.

Methodology

The index is a market capitalization weighted index with base date of January 01, 2000, indexed to a base value
of 1000.

Selection Criteria

Selection of the index set is based on the following criteria:

1. Company's market capitalisation rank in the universe should be less than 500

2. Company's turnover rank in the universe should be less than 500

3. Company's trading frequency should be at least 90% in the last six months.

4. Company should have a positive networth.

5. A company which comes out with a IPO will be eligible for inclusion in the index, if it fulfills the normal
eligiblity criteria for the index for a 3 month period instead of a 6 month period.
 CNX Nifty Junior

Particulars Details
Index - Name of Index CNX NIFTY JUNIOR
Base Year 1996
Base Value 1000
Number of Scrips 50
Index construction
Nature of Index
Index P/E Daily P/E of CNX NIFTY JUNIOR
Market Coverage
Volume coverage
Calculation frequency On-line
Calculated by India Index Services & Products Ltd. (IISL)
List of vendors for dissemination of information Reuters, Bloomberg, Thomson , Spider
Industry-wise Market Capitalisation, Weightage, Beta etc.
Annual dividend yield of the index
Historical price data of index movements
Types of products available on the Index Index Futures, Index Options
Top

CNX 100

Particulars Details
Index - Name of Index CNX 100
Base Year 2003
Base Value 1000
Number of Scrips 100
Index construction
Nature of Index
Index P/E Daily P/E of CNX 100
Market Coverage
Volume coverage
Calculation frequency On-line
Calculated by India Index Services & Products Ltd. (IISL)
List of vendors for dissemination of information Reuters, Bloomberg, Thomson , Spider
Industry-wise Market Capitalisation, Weightage etc
Annual dividend yield of the index
Historical price data of index movements
Types of products available on the Index Index Futures, Index Options
&P CNX Defty

Almost every institutional investor and off-shore fund enterprise with an equity exposure in India would like to
have an instrument for measuring returns on their equity investment in dollar terms. To facilitate this, a new
index the S&P CNX Defty-Dollar Denominated S&P CNX Nifty has been developed.S&P CNX Defty is S&P CNX
Nifty, measured in dollars.

Salient Features

• Performance indicator to foreign institutional investors, off shore funds, etc.

• Provides an effective tool for hedging Indian equity exposure.
• Impact cost of the S&P CNX Nifty for a portfolio size of Rs.5 million is 0.07%
• Provides fund managers an instrument for measuring returns on their equity investment in dollar terms.

Calculation of S&P CNX Defty

Computations are done using the S&P CNX Nifty index calculated on the NEAT trading system of NSE and USD
Rupee exchange rate that is based on the real time polled data feed

S&P CNX Defty = S&P CNX Nifty at time t * Exchange rate as on base date
Exchange rate at time t

Specifications of S&P CNX Defty:

Base date: 03 November 1995

Base S&P CNX Defty Index Value: 1000
S&P CNX Nifty Value as on Base date: 1000
Exchange rate as on base date: 34.65
Adjustment factor as on Base date:1.00

S&P CNX 500

The S&P CNX 500 is India’s first broad-based benchmark of the Indian capital market for comparing portfolio
returns vis-a-vis market returns. The S&P CNX 500 represents about 90.30% of total market capitalization and
about 80.02% of the total turnover on the NSE as on March 30, 2007.

The S&P CNX 500 companies are disaggregated into 72 industry indices viz. S&P CNX Industry Indices. Industry
weightages in the index reflect the industry weightages in the market. For e.g. if the banking sector has a 5%
weightage in the universe of stocks traded on NSE, banking stocks in the index would also have an approx.
representation of 5% in the index.
 Home > Indices > IISL Indices > CNX Midcap
IISL
-----
Products &
Services CNX Midcap
-----
IISL Indices
----- The medium capitalised segment of the stock market is being increasingly perceived as an attractive
Index investment segment with high growth potential. The primary objective of the CNX Midcap Index is to cap
Concepts the movement and be a benchmark of the midcap segment of the market.
-----
Statistics
----- Method of Computation
Index Funds
----- CNX Midcap is computed using market capitalisation weighted method, wherein the level of the index ref
IISL Press the total market value of all the stocks in the index relative to a particular base period. The method also
Releases into account constituent changes in the index and importantly corporate actions such as stock splits, righ
-----
FAQs
without affecting the index value.
-----
IISL - Base Date and Value
Publications
----- The CNX Midcap Index has a base date of Jan 1, 2003 and a base value of 1000
Licensing
-----
Contact Us Criteria for Selection of Constituent Stocks
-----
The constituents and the criteria for the selection judge the effectiveness of the index. Selection of the in
set is based on the following criteria :

• All the stocks, which constitute more than 5% market capitalization of the universe (after sortin
securities in descending order of market capitalization), shall be excluded in order to reduce th
skewness in the weightages of the stocks in the universe.

• After step (a), the weightages of the remaining stocks in the universe is determined again.

• After step (b), the cumulative weightage is calculated.

• After step (c) companies which form part of the cumulative percentage in ascending order unto
75 percent (i.e. upto to 74.99 percent) of the revised universe shall be ignored.

• After, step (d), all the constituents of S&P CNX Nifty shall be ignored.

• From the universe of companies remaining after step (e) i.e. 75th percent and above, first 100
companies in terms of highest market capitalization, shall constitute the CNX Midcap Index sub
fulfillment of the criteria mentioned below.

Trading Interest

All constituents of the CNX Midcap Index must have a minimum listing record of 6 months. In addition, a
candidates for the Index are also evaluated for trading interest, in terms of volumes and trading frequen

Financial Performance

All companies in the CNX Midcap Index have a minimum track record of three years of operations with a
positive net worth.

Others

A company which comes out with a IPO will be eligible for inclusion in the index, if it fulfills the normal
eligibility criteria for the index for a 3 month period instead of a 6 month period.

List of CNX Midcap stocks

Top
Ten Most Active Securities
As on 24-Aug-20

Total Traded Traded Value Prev % Last Last

Symbol LTP
Quantity (Rs.lakhs) Close Change Ex Date Corporate Action
13-JUN- DIVIDEND-RS.14/- PER SH PUR
SBIN 2393197 34747.31 1466.05 1414.75 3.63
07 REVISED
21-MAR- INT DIV-RS.11/- PER SH PURPO
RELIANCE 1699023 29967.37 1776.35 1744.00 1.85
07 REVISED
SUZLON 2279906 27938.20 1229.75 1256.65 -2.14 12-JUL-07 AGM
SELMCL 10571854 21842.51 218.65 186.05 17.52 - -
31-AUG-
IVRCLINFRA 6270604 20802.73 340.20 341.90 -0.50 AGM/DIV-RE.1/- PER SH
07
RCOM 4022426 19842.23 498.55 487.00 2.37 05-JUL-07 AGM/DIVIDEND-10%
OMAXE 5943266 18707.62 322.25 299.20 7.70 - -
DLF 3272452 18301.19 565.85 555.20 1.92 - -
14-JUN-
ICICIBANK 2046516 17018.21 833.80 824.95 1.07 AGM/DIVIDEND -100%
07
06-JUN-
INFOSYSTCH 925678 16741.81 1825.60 1811.55 0.78 AGM/FIN DIV-RS6.50 PER SH
07

Note:
• % change is w.r.t. Prev. Close

• On ex-date % change is w.r.t. open price

Top Ten Gainers (All Securities)
Top Gainers: All securities | Nifty | Jr. Nifty | securities > Rs.20 | securities < Rs.20
Top Losers: All securities | Nifty | Jr. Nifty | securities > Rs.20 | securities < Rs.20

As on 24-Aug-2007 16:00:15 IST

Total Last Las

Symbol Open Price High Price Low Price LTP Prev Close % Change
trd qty Ex Date Corporate
SELMCL 188.00 221.80 176.00 218.65 186.05 17.52 10571854 - -
ASIANTILES 93.70 110.40 91.50 105.70 94.20 12.21 8835658 - -
30-AUG-
SANGHIIND 77.00 85.50 75.00 81.60 73.25 11.40 507099 AGM
07
14-AUG-
VHL 225.00 238.80 225.00 238.35 214.10 11.33 19 ANNUAL BOOK C
07
20-SEP-
SRIADIKARI 18.35 21.15 17.85 19.75 17.80 10.96 173846 AGM/DIVIDEND-
06
16-MAY-
JSWSTEEL 521.00 579.70 521.00 571.60 518.95 10.15 1223073 ANNUAL GENERA
07
18-SEP-
MURUDCERA 109.50 118.25 109.00 118.25 107.50 10.00 88804 AGM/DIVIDEND-
07
FTCSF3YGRO 10.90 10.90 9.45 9.95 9.05 9.94 1510 - -
HTMTGLOBAL 300.05 332.50 300.05 329.05 299.30 9.94 162069 - -
21-SEP-
TODAYS 54.50 60.50 54.10 60.15 55.00 9.36 42837 AGM/DIVIDEND-
06
Settlement
Settlement is on a rolling basis, i.e. there is no account period settlement. Each order has a unique settlement
date specified upfront at the time of order entry and used as a matching parameter. It is mandatory for trades to
be settled on the predefined settlement date. The Exchange currently allows settlement periods ranging from
same day (T+0) settlement to a maximum of (T+2) for non-government securities while settlement of all outright
secondary market transactions in government securities was standardized to T+1. In case of repo transactions in
government securities, first leg can be settled either on T+0 basis or T+1 basis. The above guidelines came into
effect from May 24, 2005.(Refer Circular no: NSE/WDM/6313)

In case of government securities, the actual settlement of funds and securities are effected directly between
participants or through Reserve Bank of India (RBI). All trades in government securities are reported to RBI-SGL
through the Negotiated Dealing System (NDS) of RBI, and Clearing Corporation of India Limited (CCIL) provides
settlement guarantee for transactions in government securities including repos. The trades are settled on a net
basis through the DvP-III system. In the DvP-III, the settlement of Securities and Funds are carried out on a net
basis.

For securities other than government securities and T-bills, trades are settled on a gross basis directly between
participants on delivery versus payment basis.

On the scheduled settlement date, the Exchange provides data/information to the respective member/participant
regarding trades to be settled on that day with details like security, counter party and consideration.

The settlement details for non-government securities, i.e. certificate no., Cheque no., constituent etc. are
reported by the member/participant to the Exchange.

The Exchange closely monitors the settlement of transactions through the reporting of settlement details by
members and participants. In case of deferment of settlement or cancellation of trade, participants are required
to seek prior approval from the Exchange. For any dispute arising in respect of the trades or settlement, the
exchange has established arbitration mechanism for resolving the same.

Test at NSE Centres

Test Centre Test Centre Contact Numbers

1 National Stock Exchange of India Ltd. Tel : 022 - 26598171-72

"Exchange Plaza", 022 - 26598216 / 8252
Bandra Kurla Complex, 022 - 26598100 - 114
Bandra (East), Fax : 022 - 26598393
Mumbai-400051

2 National Stock Exchange of India Ltd. Tel : 011-23344313-27

4th Floor, Fax : 011-23366658
Jeevan Vihar Building
Parliament Street
New Delhi-110001

3 National Stock Exchange of India Ltd. Tel : (033) 24631802-1805,

1st Floor, Park View Apartments 24631809-1812 (Board Nos)
99, Rash Behari Avenue Fax. (033) 24631791, 24631806
Kolkata – 700 029

4 National Stock Exchange of India Ltd. Tel : 044-28475100

7th Floor, Arihant Nitco Park Fax : 044-28473633
90, Dr.Rashakrishnan Salai
Mylapore
Chennai - 600 004

5 National Stock Exchange of India Ltd. Tel : 040-23227084/5

H No.3-6-322 Fax : 040-23227086
Mahavir House, IInd Floor
Chamber no.203 & 204
Basheerbagh
Hyderabad : 500029

6 National Stock Exchange of India Ltd. Tel : 079-26580212 - 13

406 Sakar II Fax : 079-26576123
Near Ellis Bridge
Ahmedabad – 380 006

7 Any other place (depending on demand)

Note :
The candidate should reach the test centre on the test date 15 minutes
prior to the scheduled time.

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