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DETAIL OF SENSEX TOTAL/VALUE?

CA Lokesh Pokharna (CA (Ahmedabad Bhilwara Chittorgarh)) (4128 Points)

04 November 2010

HIIIIIII GUYS / FRNDS / EXPERTS/ I WANNA DETAIL OF SENSEX VALUE ??????? FOR EXA: CURRENTALLY SENSEX AROUND 20900 I WANT DATAIL OF IT / BREAK UP OF IT . WE KNOW THAT SENSEX VALUE BECOME FROM BSE 30 STOCKS BOT WHEN I DID TOTAL OF THOSE SHARES IT COMES ABOVE 30000,,,,,, SO PLZ TELL ME WHICH STOCK CONTRIBUTING HOW MUCH IN THE SENSEX VALUE?

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9 Replies

CA Himanshu Bansal (Risk Manager) (2345 Points)
Replied 05 November 2010

Calculation Methodology :

SENSEX is calculated using the 'Free-float Market Capitalization' methodology. As per this methodology, the level of index at any point of time reflects the Free-float market value of 30 component stocks relative to a base period. The market capitalization of a company is determined by multiplying the price of its stock by the number of shares issued by the company. This market capitalization is further multiplied by the free-float factor to determine the free-float market capitalization.

The base period of SENSEX is 1978-79 and the base value is 100 index points. This is often indicated by the notation 1978-79=100. The calculation of SENSEX involves dividing the Free-float market capitalization of 30 companies in the Index by a number called the Index Divisor. The Divisor is the only link to the original base period value of the SENSEX. It keeps the Index comparable over time and is the adjustment point for all Index adjustments arising out of corporate actions, replacement of scrips etc. During market hours, prices of the index scrips, at which latest trades are executed, are used by the trading system to calculate SENSEX every 15 seconds and disseminated in real time.

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CA Himanshu Bansal (Risk Manager) (2345 Points)
Replied 05 November 2010

Scrip selection criteria :

The general guidelines for selection of constituents in SENSEX are as follows:

Listed History:The scrip should have a listing history of at least 3 months at BSE. Exception may be considered if full market capitalisation of a newly listed company ranks among top 10 in the list of BSE universe. In case, a company is listed on account of merger/ demerger/ amalgamation, minimum listing history would not be required.

Trading Frequency:The scrip should have been traded on each and every trading day in the last three months. Exceptions can be made for extreme reasons like scrip suspension etc.

Final Rank:The scrip should figure in the top 100 companies listed by final rank. The final rank is arrived at by assigning 75% weightage to the rank on the basis of three-month average full market capitalisation and 25% weightage to the liquidity rank based on three-month average daily turnover & three-month average impact cost.

Market Capitalization Weightage:The weightage of each scrip in SENSEX based on three-month average free-float market capitalisation should be at least 0.5% of the Index.

Industry Representation:Scrip selection would generally take into account a balanced representation of the listed companies in the universe of BSE.

Track Record:In the opinion of the Committee, the company should have an acceptable track record.

CA Himanshu Bansal (Risk Manager) (2345 Points)
Replied 05 November 2010

Understanding Free-float Methodology :

Concept :

Free-float Methodology refers to an index construction methodology that takes into consideration only the free-float market capitalization of a company for the purpose of index calculation and assigning weight to stocks in Index. Free-float market capitalization is defined as that proportion of total shares issued by the company that are readily available for trading in the market. It generally excludes promoters' holding, government holding, strategic holding and other locked-in shares that will not come to the market for trading in the normal course. In other words, the market capitalization of each company in a Free-float index is reduced to the extent of its readily available shares in the market.

In India, BSE pioneered the concept of Free-float by launching BSE TECk in July 2001 and BANKEX in June 2003. While BSE TECk Index is a TMT benchmark, BANKEX is positioned as a benchmark for the banking sector stocks. SENSEX becomes the third index in India to be based on the globally accepted Free-float Methodology.

CA Himanshu Bansal (Risk Manager) (2345 Points)
Replied 05 November 2010

Definition of Free-float :

Share holdings held by investors that would not, in the normal course come into the open market for trading are treated as 'Controlling/ Strategic Holdings' and hence not included in free-float. In specific, the following categories of holding are generally excluded from the definition of Free-float :

Holdings by founders/directors/ acquirers which has control element
Holdings by persons/ bodies with 'Controlling Interest'
Government holding as promoter/acquirer
Holdings through the FDI Route
Strategic stakes by private corporate bodies/ individuals
Equity held by associate/group companies (cross-holdings)
Equity held by Employee Welfare Trusts
Locked-in shares and shares which would not be sold in the open market in normal course.
The remaining shareholders would fall under the Free-float category.

CA Lokesh Pokharna (CA (Ahmedabad Bhilwara Chittorgarh)) (4128 Points)
Replied 06 November 2010

YES HIMANSHU I KNOW SENSEX CALCULATED AS PER FREE FLOATE MKT CAP METHODOLOGY......BUT I WANNA WHICH STOCK ,HOW MUCH CONTRIBUTING IN FORMATION OF SENSEX VALUE.........I WANNA LIST FOR EXA: THAT RELIANCE IND. CONTRIBUTING 1500 POINTS TATA MOTORS CONTRIBUTING 500 POINTS

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CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 09 November 2010

Dear Himanshu,

Very good boss. Nice information. Keep sharing...

Samarth Mehta (none) (59 Points)
Replied 09 November 2010

https://www.moneycontrol.com/stocks/marketstats/indexcomp.php?optex=BSE&opttopic=indexcomp&index=4

https://www.moneycontrol.com/stocks/marketstats/indcontrib.php?optex=BSE&opttopic=indcontrib

Samarth Mehta (none) (59 Points)
Replied 09 November 2010

https://www.bseindia.com/about/abindices/bse30.asp

Attached File : 26 indices.zip downloaded: 274 times

Samarth Mehta (none) (59 Points)
Replied 09 November 2010

like u must have seen in the last link that on 01-01-1986 the index value taken as a base was 100( which is ususlly the value of most bases). now the total of prices of 30 shares in the index on that date was not 100. therefore index is not the total of current market price of shares constituing the index