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| Index Calculation & Maintenance | |||||||||||||||||||||||||
Formula for calculation of index is All BSE indices (except BSE PSU index) are calculated using following formula: Free-float market capitalisation of index constituents/ Base Market Capitalisation * Base Index Value For calculation of BSE PSU index, full market capitalisation of index constituents is considered instead of free-float market capitalisation, as this is the only index at BSE calculated on full-market capitalisation methodology. Dollex-30, Dollex-100 and Dollex-200 are dollar-linked version of SENSEX, BSE-100 and BSE-200 index. For more details click ‘ Dollex series of BSE indices . Index Closure Algorithm The closing index value on any trading day is computed taking the weighted average of all the trades of index constituents in the last 30 minutes of trading session. If an index constituent has not traded in the last 30 minutes, the last traded price is taken for computation of the index closure. If an index constituent has not traded at all in a day, then its last day's closing price is taken for computation of index closure. The use of index closure algorithm prevents any intentional manipulation of the closing index value.
Adjustments for Rights Issues: When a company, included in the compilation of the index, issues right shares, the free-float market capitalisation of that company is increased by the number of additional shares issued based on the theoretical (ex-right) price. An offsetting or proportionate adjustment is then made to the Base Market Capitalisation.
Adjustments for Bonus Issue: When a company, included in the compilation of the index, issues bonus shares, the market capitalisation of that company does not undergo any change. Therefore, there is no change in the Base Market Capitalisation; only the 'number of shares' in the formula is updated.
Other Issues: Base Market Capitalisation Adjustment is required when new shares are issued by way of conversion of debentures, mergers, spin-offs etc. or when equity is reduced by way of buy-back of shares, corporate restructuring etc.
Base Market Capitalisation Adjustment: The formula for adjusting the Base Market Capitalisation is as follows:
To illustrate, suppose a company issues additional shares, which increases the market capitalisation of the shares of that company by say, Rs.100 crores. The existing Base Market Capitalisation (Old Base Market Capitalisation), say, is Rs.2450 crores and the aggregate market capitalisation of all the shares included in the index before this issue is made is, say Rs.4781 crores. The "New Base Market Capitalisation " will then be:
This figure of 2501.24 will be used as the Base Market Capitalisation for calculating the index number from then onwards till the next base change becomes necessary. | |||||||||||||||||||||||||
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