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Wednesday, June 23, 2010

BSE 200 Index

BSE 200 Index was constructed and launched on 27th May 1994. The number of companies listed on the Bombay Stock Exchange registered a phenomenal increase from 992 in the year 1980 to about 3,200 companies by the end of March 1994. These factors necessitated compilation of a new broad-based index series reflecting the present market trends in a more effective manner and providing a better representation of the increased equity stocks, market capitalization as also the newly emerged industry groups. The financial year 1989-90 was chosen as the base year of BSE 200 Index because of the price stability exhibited during that year and due to its proximity to the current period. The base value of the index has been fixed at 100 points.

The equity shares of 200 selected companies from the specified and non-specified lists of this Exchange have been considered for inclusion in the sample for `BSE-200'. The companies have been selected on the basis of current market capitalization of the listed scrips on the exchange, the market activity as reflected by the volumes of turnover of the companies, and certain fundamental factors.

Scrip Selection Criteria for BSE 200 Index

Trading Frequency: The scrip should have been traded for at least 90% of the trading days in the last three months. There can be exceptions in case of extreme reasons like scrip suspension etc.

Final Rank: The scrip should rank among the top 350 companies listed by final rank. For the purpose of calculation of final rank, 75% weightage is assigned to the rank obtained on the basis of three-month average full market capitalization and 25% weightage to the liquidity rank based on three-month average daily turnover & three-month average impact cost.

Industry/Sector Representation: Scrip is generally selected taking into account a balanced sectoral representation of the listed companies in the BSE.

Track Record: The company should have an acceptable track record