Investing in India - Emerging Market that has Already Emerged
Investing in India, the third largest stock exchange in the world, provides investors with stocks, ETFs, futures and options capabilities.
Smart investors should look for investing in India today. National Stock Exchange stands as the 18th largest stock exchange in the world in terms of value of shares traded. India has a robust financial system supervised by the Reserve Bank of India (RBI) also managed by the the Securities and Exchange Board of India (SEBI) about capital markets and investment funds. With high savings rate, India offers an important opportunity for transferring resources to the financial channel. India offers over 20 stock exchanges.
The National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) are the major stock exchanges. NSE contributes over 70 percent of trading turnover. Investing in India is under more than 8,000 brokers plus nearly 44,000-registered sub-broker with SEBI. Mutual Funds in India had been managed in assets with amount to $165 billion (INR 7,944 billion) in December 2009. Over 11,000 non-banking financial companies (NBFCs) registered on RBI. The microfinance sector in India is growing fast. Market capitalization of Indian companies on the exchange has more than tripled between 2004 - 2005 and 2009 - 2010. Investment in the service sector in India including financial services has attracted the maximum FDI between April 2009 and January 2010 with amount of $ 3.8 billion. The highest ranking in the industry for inbound deal was T. Rowe Price Group obtained 26 percent share of UTI Asset Management Company Ltd for $ 140.1 million in 2009. Settlement of Investing in India is now T + 2 (faster than other advanced countries like USA, Mera Bharat Mahan Jai Hind). The National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) are the major stock exchanges of India as follows:
The National Stock Exchange (NSE)
The National Stock Exchange (NSE) is based in Mumbai, India. It is the largest stock exchange for investing in India in terms of daily turnover and number of transactions for equities and derivatives. NSE has a market capitalization of about 6,393,418 million rupees (U.S. $ 1,451.31 billion) in August 2010 and was the largest stock exchange in India in terms of market capitalization in the end of 2009. Despite a series of exchanges with others existed, NSE and the Bombay Stock Exchange are the two major stock exchanges in India with the vast majority of stock transactions. The benchmark index of the NSE is the S & P CNX Nifty are known as Nifty NSE (National Stock Exchange of fifty) as an index of fifty blue-chips in terms of market capitalization. NSE is belong to both sides by a group of major financial institutions, banks, insurance companies and other financial brokers in India but it operates independently. At least two foreign investors like Goldman Sachs and NYSE Euronext who have invested in the NSE. It covers the NSE VSAT terminals with 2799 in more than 1500 cities of India since 2006. The market capitalization of companies listed on the NSE was U.S. $ 1.46 trillion in October 2007, which is the second largest stock exchange in South Asia. NSE stands as the third largest stock exchange worldwide according to the number of transactions in shares. This is the second rapid growth stock market in the world with a growth of 16.6%. The NSE was promoted by leading financial institutions at the request of the Government of India and was united in November 1992 as a tax-paying company. It was conceded as a stock exchange under the Securities Contract (Regulation) Act, 1956 in April 1993. In June 1994, NSE started operations in the Wholesale Debt Market (WDM) segment. In November 1994, the NSE capital market (equities) segment began operations and whereas operations in the derivatives segment stared in June 2000. Currently, NSE has the following main segments of capital markets: Securities, Futures and Options, Retail Debt Market, Wholesale Debt Market, Currency Futures, Mutual Fund, Stock Lending & Borrowing.
In August 2008 exchange derivatives were introduced in India with the launch of currency futures in USD INR. Today it launched currency futures in Euro, Pound and Yen. Interest Rate Futures was announced by NSE for the first time in India on 31 August 2009, established rightly a year after the introduction of the currency futures. NSE was the first exchange for the approval of future interest rates by the RBI-SEBI Committee on August 31, 2009, a 10 years futures contract Goi bond (Notional) based on 7% was opened. Market new time of NSE from 4th January 2010 is 9:00 to 15:30 in India time. NSE has several types of exchange. They are generally index funds and ETFs GOLD. Some of the popular ETFs on NSE are:
- NIFTYBEES - ETF based on NIFTY index Nifty BEES Live quote
- GoldBees - ETF based on Gold prices. Tracks the price of Gold. Each unit is equalent to 1 gm of gold and bears the price of 1gm of gold.
- BankBees - ETF that tracks the CNX Bank Index.
NSE leads online certification exam and prices in the NSE certification in financial markets (NCFM). Currently, certificates are available in 19 modules in various areas of financial markets and capital. Branches of the NSE are located in India. National Stock Exchange of India Ltd, Exchange Plaza, Plot no. C/1, Block G, Bandra-Kurla Bandra (E), Mumbai - 400 051.
The Bombay Stock Exchange (BSE)
The Bombay Stock Exchange (BSE) is the second largest stock exchange for investing in India. It is the oldest exchange in Asia and the largest number of listed companies worldwide, with 4990 companies listed in August 2010. In 1956, the first BSE-exchange was recognized and regulated by the Government of India under the Law on Securities. It is based on Dalal Street, Mumbai, India. In August 2010, the market capitalization of corporations listed on BSE was $ 1,39 trillion put it the 4th largest exchange in Asia and 11th in the world. With more than 4990 listed companies in India and over 7700 scripts on the Exchange, has a amazing turnover. BSE and National Stock Exchange of India stand for most of stock trading in India.
Many investors speculate on stocks that come to India because the market is fast growing and in recent decades it has a huge influx of money into stock markets. But getting in investing in India is necessary to follow some basic guidelines that have simplified in recent years. This means you should research on your own in what kind of securities you trade.
Written by: Goran Dolenc
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