BSE launches five new market cap-based indices
The move is in response to the Securities and Exchange Board of India (SEBI) circular of October 6. (Express photo by Ganesh Shirsekar) The move is in response to the Securities and Exchange Board of India (SEBI) circular of October 6. (Express photo by Ganesh Shirsekar)
Asia Index, the equal joint venture between BSE and S&P Dow Jones Indices, today launched five size-based indices to measure the performance of the large-cap, mid-cap and small-cap companies. This would better represent the market capitalisation and help meet the regulatory requirements, according to a statement.
The move is in response to the Securities and Exchange Board of India (SEBI) circular of October 6, which outlined detailed guidelines for the categorisation and rationalisation of mutual fund schemes. “The new set of size indices are a suitable benchmark for market participants and are in line with the Sebi circular. We will continue to ensure we meet market demands and provide suitable, transparent and rules-based benchmarks,” said Alka Banerjee, Asia Index chief executive said in a statement.
The new indices comprise stocks from the constituents of the BSE 500 Index and are weighted on the basis of their float-adjusted market capitalisation, she added.
The BSE 150 Midcap Index is designed to measure the performance of 150 mid-cap stocks by total market capitalisation subject to buffers, in the BSE 500 but not in BSE 100. The BSE 250 Smallcap Index is designed to measure the performance of 250 small-cap companies, by total market capitalisation, in the BSE 500 that are not part of the BSE 100 and BSE 150 MidCap. The BSE 250 LargeMidcap Index measures the performance of 250 companies on the basis of their mcap in the BSE 100 and BSE 150 mid-caps, while the BSE 400 MidSmallcap Index gauges performance of 400 stocks in the BSE 500 that are not part of the BSE 100 Index.
Finally, the BSE 250 LargeMidcap 65:35 Index is designed to gauge the performance of a composite index comprising BSE 100 and BSE 150 mid-caps. The index consisting of a position with a 65 per cent index weight in the BSE 100 and a 35 per cent weight in the BSE 150 Midcap. The new indices have a back test first value date starting from Sep 16, 2005 and are calculated in the rupees and the US dollar for both price returns and total returns versions.
While the value of the BSE 250 LargeMidcap Index will be available at the end of the day, the values of the rest of the indices will be on a real-time basis. The indices will be rebalanced semi-annually, in June and December, whereas, the BSE 250 LargeMidcap Index will be rebalanced quarterly. Asia Index is a 50-50 partnership between S&P Dow Jones Indices and BSE.
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