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National Stock Exchange: What is NSE? Market segment of NSE, Functions of NSE, Management, Trading Schedule, NSE NIFTY 50

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National Stock Exchange
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Incorporated in 1992, The National Stock Exchange of India Limited (NSE) is India’s largest financial market offering capital raising abilities for corporations and a trading platform for equities, debt, derivatives including mutual fund units and currencies. It is India’s leading stock exchange with a total market capitalization of more than US$2.27 trillion as of April 2018, making it the world’s 11th-largest stock exchange.

NIFTY 50 Index is one of the popular offerings, which tracks the largest assets in the Indian equity market. NIFTY 50 is regarded as the flagship index which represents about 63% of total market capitalization listed on the exchange. US investors can access the index with ETF (Exchanged traded funds) like the iShares India 50 ETF, which is listed under the ticker symbol INDY.

The national stock exchange is the largest private wide-area network in the country which supports more than 3,000 VSAT terminals. In 2018, NSE introduced cross-currency derivatives contracts on GBP-USD, EUR-USD, and USD-JPY.

National Stock Exchange (NSE)

Founded1992
LocationMumbai, Maharashtra, India
CurrencyIndian rupee (₹)
No. of listings1,952
Market capUS$2.27 trillion (April 2018)
Websitewww.nseindia.com

Operation/Market Segment of NSE:

Operations of NSE are divided into two market segments-

  1. Wholesale Debt Market (WDM) segment (commenced operations in June 1994)
  2. Capital Market segment (commenced operations in November 1994)

WDM segment provides trading facilities for a variety of debt instruments like Government Securities, Bonds of PSUs, Treasury bills, Certificates of Deposits, units of MF’s, Commercial paper, zero-coupon bonds, mutual funds, etc.

  • Trading can be done only by members, recognized by the NSE. The membership is open only to, body corporates, financial institutions, and subsidiaries of banks.
  • WDM product, which is now disseminated jointly with FIMMDA, the FIMMDA NSE MIBID/MIBOR is used as a benchmark rate for the majority of deals struck for Interest Rate Swaps, Floating Rate Debentures, Forwards Rate Agreements, and Term Deposits in the country.
  • Even NSE-VaR for Fixed Income Securities as well as ‘Zero Coupon Yield Curve’ have become very popular for the valuation of sovereign securities across all maturities irrespective of its liquidity and facilitated the pricing of GOI Bond Index and corporate papers.

The capital market segment of NSE covers trading on equities and convertible debentures. The players in the market include individuals, corporates, registered firms, and institutions. This segment offers investors NEAT (National Exchange for Automated Trading), a fully automated screen-based trading system that enables members from across the country to trade with enormous ease and efficiency.

In addition to these two segments, there is also an

a) NSEs Futures & Options segment which provides trading of a wide range of derivatives like Index Options, Index Futures, Stock Options, and Stock Futures, which commenced on June 2000.

b) NSE Currency Derivatives segment which commenced on August 29, 2008, provides trading on currency futures contracts on the USD-INR.

The important subsidiaries of NSE include:

  1. National Securities Clearing Corporation Ltd. (NSCCL) Estd. 1995
  2. National Securities Depository Ltd. (NSDL) -Estd. October 1996- which is the repository of all securities in electronic form.
  3. India Index Services & Products Ltd. (IISL) Estd. 1998.
  4. NSE.IT Ltd. Estd. in 1999.

The NSE series of indices includes Nifty, Nifty Junior, CNX 100, CNX Midcap, etc.

Functions And Working Of NSE

NSE serves as a role of a catalytic agent in reforming the market in terms of microstructure and market practices.

  1. Because of NSE’s innovative endeavors, the market today uses state-of-art information technology to provide efficient and transparent trading, clearing and settlement mechanism with the elimination of settlement risks.
  2. NSE provides the screen-based automated trading system with a high degree of transparency in trading and operations and equal access to investors irrespective of geographical location.
  3. The investor is assured of the best price in the market with price and brokerage are separately shown on contract notes.
  4. NSE has given importance to information technology to increase liquidity in these 20 years and now can handle 1,60,000 orders/messages per second. This ensures NSE with infinite ability to scale up at short notice on demand, thus increasing investor’s confidence.

Management of National Stock Exchange

NSE has adopted the form of a demutualized exchange – the management, ownership, and trading are in the hands of three different sets of people.

NSE is owned by a set of leading financial institutions, insurance companies, banks, and other financial intermediaries. But the exchange is managed by professionals, who do not directly or indirectly trade on the Exchange which has completely eliminated any conflict of interest. This helped NSE in aggressively pursuing policies and practices maintaining a public interest framework.

The exchange comprises of senior executives in the fields of law, finance, economics, taxation, accountancy, etc, nominees of SEBI, public representatives, and one full-time executive.

The board deals with broad policy, procedure and compliance issues, and also focus on decisions relating to market operations. And then delegated by the Board to various committees includes representatives from trading members, the public, professionals, and the management. The day-to-day working management of the Exchange is managed by the Managing Director, supported by a team of professional staff.

NSE EMERGE

NSE EMERGE is a National stock exchange’s new intuitive for growth and development of SME & Startup companies from India where companies can get listed without IPO (initial public offer) on NSE. This platform will help SME & Startup to connect with investors and help them with the funding.

Trading Schedule Of NSE

Trading on the NSE equities segment takes place on all days of the week except Saturdays, Sundays and holidays declared in advance. The market timings of the equities segment are:

(1) Regular trading session: In this session, you can do the trading

  • Normal/Retail Debt/Limited Physical Market Open: 09.15 hrs
  • Normal/Retail Debt/Limited Physical Market Close: 15:30 hrs.

(2) Pre-open session:

  • Order entry & modification Open And Close: 09:00 hrs to 09:08 hrs
  • Order matching starts from 9:08 hrs to 9:15 hrs and no cancellation of the order is allowed during this session.

(3) Closing Session is from 15:30 hrs to 15:40 hrs and it is basically for calculating the closing price of the stocks. The closing price is calculated based on the average value of all the stocks in the last half an hour from 15:00 hrs to 15:30 hrs.

(4) Post Closing Session is from 15:40 hrs to 15:00 hrs. In this session, you can place an order for trading and will be placed at the closing price, if the buyer or seller is available.

NIFTY

Nifty is an amalgamation of two words, that is, Nifty’s Fifty owned and managed by India Index Services and Products Ltd. (IISL). On NSE, more than 1600 companies are listed out of which only 50 selected companies represent Nifty. Nifty or Nifty 50 is nothing but the calculated weighted average of the performance of 50 companies from 12 sectors of the Indian economy like financial, auto, pharma etc which are listed on NSE.

Base Year1978-79
Base Value100
Calculationon the basis of the free-float methodology
Market Capitalization CalculationMultiply the market price of share with a number of outstanding shares.

NIFTY is used for a variety of purposes such as benchmarking fund portfolios, index funds, and index-based derivatives.

Various indexes operating in NSE are:

  1. Bank nifty (comprising of Banking stocks)
  2. CNX IT (Information Technology Companies’ Like the Infosys, TCS etc)
  3. CNX Nifty Junior (comprises of second-most liquid stocks)
  4. CNX Midcap (Midcap companies)
  5. CNX Small Cap, etc (Small Cap Companies)

Indexes serve as lead indicators of the economy and allowing investors, financial institutions and money managers good hedging tools and instruments for their investments.

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Zomato acquire Uber Eats India in an all-stock deal

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Zomato acquire Uber Eats
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Uber Eats India has sold its online food-ordering business in India to local rival Zomato in exchange for a 9.99% i.e around Rs 2,485 crore ($350 million) in an all-stock deal.

Since launching in India in 2017, Uber Eats has struggled so much to gain market share and came third after Swiggy and Zomato. All three online food ordering have spent heavily on deals and discounts to attract customers in a highly competitive market.

 Now, Zomato will not absorb Uber Eat employees, which means they will either be absorbed in Uber’s other verticals or could face lay-off. There’s less clarity on their future roles right now. The entire deal is worth around $350 million.

This acquiring deal of Uber India by Zomato will be an attractive this will also help them  to crack Swiggy’s stronghold in the southern states. After this acquiring Uber Eats will seize to exist as a separate Uber brand in India now and all its customers will be automatically redirected to Zomato’s app. While Swiggy is little ahead of Zomato in the food delivery space right now, Uber Eats coming onboard with Zomato will try more hard to take on Swiggy, and the combined entity will capture around 50-55 per cent market share.

When it comes to the Indian food delivery market, UberEats is a distant third in comparison to its rivals Zomato and Swiggy that gets 2-2.5 million orders every day. On the other hand, UberEats only gets 2,50,000-3,00,000 orders per day. As for the value of the order, on an average UberEats witnesses $2 per order as compared to $3-4 per order for Swiggy and Zomato.

Zomato CEO said in a statement “With our expansion to 550+ cities over the last year, our continued focus on user experience and our commitment to operating excellence, we have demonstrated our ability to execute on a variety of parameters”.

Zomato has operations across 24 countries and serves more than 70 million users every month.

 

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Airtel joins Google Cloud to offer its G Suite services in India

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Airtel joins Google cloud with an aim to provide the needs of millions of Indian businesses in a rapidly digitizing economy. Airtel and Google Cloud on Monday announced a partnership that will allow the telecom operator to offer G Suite to small and medium-sized businesses (SMBs) in the country.

Airtel and Google Cloud are sharing same vision for delighting customers with great products. India with its growing economy and adoption of digital services offers one of the biggest opportunities to serve customers with innovative solutions. Gopal Vittal, MD and CEO of Bharti Airtel, said ” We are happy to strengthen our relationship with Google Cloud and building products and services together aimed at changing Indian businesses”.

The agreement will provide both huge opportunities for growth in India, which also helps India to ranks amongst the fastest-growing economies. Further Thomas Kurian, CEO of Google Cloud said “Indian companies are making a massive transformation to the cloud and we’re thrilled to partner with Airtel to support this transition. The combination of G Suite’s collaboration and productivity tools with Airtel’s digital business offerings will help accelerate digital innovations for thousands of Indian businesses”.

G Suite is a set of apps like – Gmail, Docs, Drive, Calendar and more which bring people together and help them work smarter and safer. On the other hand, Airtel currently serves over 2,500 large businesses and over 500,000 Small and Medium Business and technology startups across India.

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World Economic Forum: Union Ministers, CMs, 100 Indian CEOs and more attend Davos summit

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Union Ministers, CMs, 100 Indian CEOs and more attend Davos summit
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The World Economic Forum Annual Meeting 2020, will held on January 20-24, with aim to  focus on establishing stakeholder capitalism as a way of addressing the world’s greatest challenges, from societal divisions created by income inequality and political polarization to the climate crisis facing today.

As the rich and powerful person from across the globe assemble this week at Swiss ski resort to discuss about  sustainable world’, over 100 CEOs as also some union ministers and chief ministers from India would also be present there alongwith filmstar Deepika Padukone and Sadhguru.  Deepika will talk about mental health and other issues, Sadhguru will hold morning meditation sessions at the summit  attended by over 3,000 world leaders.

The 50th annual meeting of World Economic Forum beginning from Monday. US President Donald Trump, Britain’s Prince Charles, German Chancellor Angela Merkel, Afghanistan’s Ashraf Ghani and Pakistan Prime Minister Imran Khan would be also attending the meeting.

The Geneva-based International organisation for public-private partnership has said that  “The World Economic Forum Annual Meeting 2020, taking place on January 20-24, will focusing on making stakeholder capitalism and also discussing about world’s greatest challenges like income inequality and political polarization to the climate crisis we face today”.

The main aim of this meeting is to give a soild meaning to “stakeholder capitalism”, assist governments and international institutions in tracking progress towards the Paris Agreement and the Sustainable Development Goals, and facilitate discussions on technology and trade governance.

From India industry leaders like Gautam Adani, Rahul and Sanjiv Bajaj, Kumar Mangalam Birla, N Chandrasekaran of Tata Group, Uday Kotak, Rajnish Kumar of SBI, Anand Mahindra, Sunil and Rajan Mittal, Ravi Ruia, Pawan Munjal, Nandan Nilekani and Salil Parekh of Infosys, C Vijayakumar of HCL Tech, Ajay Piramal, Rishad Premji, Ajay Singh and Pirojsha Godrej are registered.

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Doubling investments on Amazon Prime Videos in India, says Jeff Bezos

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Amazon Prime Video is getting good response in India than anywhere else, that is why the company CEO Jeff Bezos has said  he will rise its investment for the streaming service in India .

“In Japan, Germany and in America also Prime Video is doing well.  But India is doing much better than other countries”. Bezos said this on 16 January. He also said  “the world is witnessing a golden age of television, and i want Amazon to be the most talent friendly studio in the world and India features prominently in this plan.

Bezos met Bollywood celebrities at a gathering where he talked with superstar Shah Rukh Khan and director Zoya Akhtar.

The streamer, which rivals Netflix and Hotstar, also unveile seven more shows. The shows are Dilli, Bandish Bandits, Paatal Lok, Gormint, Mumbai Diaries-26/11, The Last Hour and Sons of Soil- Jaipur Pink Panthers, will soon be joining its exclusive Indian content slate.

Bezos said ” A person should not try for a successful formula in entertainment. Storytelling is an incredibly difficult art because people always looking for something new”.”This is one of those businesses which really takes human creativity. I want Amazon Studios to be all over the world. When you look at TV series today, they are really good in terms of content. They’re as good as the very best movies have ever been. And now we’re getting the best storytellers and actors to come and do work”.

“One of the hardest things that humans do is tell creating, engaging, inspiring stories. When you get it right, it can change the world,” he said further.

Amazon Prime has signed up with the majority of Indian production houses and stars for dedicated series and shows. Bezos was also meet some corporate person. Bezos added that “the Prime membership, which comes with free shipping from Amazon, has also proved great for the e-commerce service”.These are the reason we made a decision to increase in our Prime Video investments here” he said. The number of hours that people watched Prime Video had grown by six times in just two years in India, he added.

Bezos came to India on 15 January made a commitment to invest $1 billion in India over the next few years, calling it India’s decade which we have entered in.  Union Commerce Minister Piyush Goyal on 16January said that Amazon has not done any favor by committing the money.

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Jeff Bezos’s $1 Billion MSME Push Welcomed With Protests By Local Traders

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Amazon’s CEO Jeff Bezos plans to invest around $ 1 billion to help small businesses online in India and also plans to use Amazon’s size, scope, and scale to export $10 billion of Indian goods by 2025. On the other hand, angry Indian vendors plan protests against Jeff Bezos as the authorities have launched an anti-trust investigation into e-commerce platforms like Amazon and Wallmart owned Flipkart.

Jeff Bezos came down to India for a business meeting focused on the maiden edition of Amazon’s micro, small and medium enterprises(MSME). This comes in at the moment when the Competition Commission of India(CCI) on Monday announced an investigation into Amazon and Flipkart on several complaints that claim that there have been tie-ups and deep discounting practices with preferred sellers which have probably killed small businesses.

Bezos donned the traditional Indian attire to showcase his company’s commitment to be a long-term partner of India. The firm proposed investment to assist and digitize around 10 million MSMEs by providing training and enrolling MSMEs into Amazon’s programs. Along with this, Amazon will assist them to be able to work on cloud technology through specialized offers at low costs from Amazon Web Services.

Amazon also confirmed it would fully cooperate with the investigation and was confident that its operations were legal. But traders across the country planned protests during the visit demanding the government to take action against Amazon. Several merchants have accused these e-commerce giants of breaking and disregarding foreign investment rules while giving billions of dollars into discounts that have forced many traditional traders to lose their businesses.

Amazon in the past five years has invested around $5 billion in India. They even also announced to expand it’s Amazon Easy Programme and ‘I Have Space’ Programme to support local neighborhood shops as well as Kiranas. This will look into helping shops and kiranas to set up kiosks to provide guidance to customers helping them choose the right products, place orders and earn commission on sales.

These protests were actively planned in 300 cities by The Confederation of All Indian Traders that represents around 70 million small businesses. Though the CCI said that it would report within 60 days, inquiries might take much longer time as usual. Last year, Google was fined $21 million USD by CCI for abusing Google’s dominant position for creating a search bias.

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