India’s BSE Ties Up With S&P Dow Jones for Sensex Index BrandingRajhkumar K Shaaw and Santanu Chakraborty
India’s BSE Ltd. said it would use the name of S&P Dow Jones Indices for its indexes, a week after bigger rival the National Stock Exchange of India Ltd. ended a similar agreement with the U.S. company.
The BSE, formerly known as the Bombay Stock Exchange Ltd., renamed its benchmark 30-stock BSE India Sensitive Index to S&P Dow Jones Sensex Index starting today, according to a statement issued in Mumbai.
The National Stock Exchange, BSE’s main rival in India’s $1.2 trillion stock market, said Feb. 12 a pact with S&P Dow Jones for its 50-stock CNX Nifty Index and other gauges ended on Jan. 31. The NSE handles twice the amount of shares of its 137-year-old rival and controls more than 80 percent of the nation’s $28 billion equity derivatives market, data compiled by Bloomberg show. MCX Stock Exchange Ltd. Feb. 11 became the third local bourse to trade stocks.
“S&P branding will give the Sensex more international recognition but whether that will translate into volumes or revenue only time will tell,” U.R. Bhat, managing director of Dalton Capital Advisors India Pvt., said by phone from Mumbai. “It’s all about building adequate liquidity.”
About 25 million Indian households invest directly or indirectly in the capital markets, according to a survey in July 2011 by the National Council of Applied Economic Research. Retail participation at 1.3 percent of the population compares with 9.4 percent in China, 41 percent in Australia and 18 percent in the U.K., Thomas Mathew, a former joint secretary in the Ministry of Finance’s capital markets division, said in an interview on Sept. 5.
The BSE, Asia’s oldest stock exchange, is backed by Deutsche Boerse AG, while Goldman Sachs Group Inc. has a stake in the NSE, according to the exchanges’ websites.