Bombay Stock Exchange
(BSE)
Description
What is it That the Bombay Stock Exchange (BSE) Does? When one talks about the financial markets in India, this is one of the very first names that spring to your mind. One of the oldest and world’s most respected stock markets; that’s what the Bombay Stock Exchange is. Thus, when you are a rookie investor looking for more information or are inquisitive, learning about BSE becomes vital in understanding the Indian economy.
Here is a small history.
Yes, that’s right. It has been over 150 years and is the oldest stock exchange in Asia. A group of stockbrokers would meet under a banyan tree in Mumbai (then Bombay) to trade shares.
This growth was concurrent with the economic growth of India and started off from being a small group of brokers to a well-organized business house: The Government of India Recognized it in 1957 under The Securities Contracts(Regulation) Act; By far, the Bombay Stock Exchange is diversified to Location which is well connected and advanced among other Stock Exchanges in the world.
This host of the building The Phiroze Jeejeebhoy Towers, commonly known within the city is a familiar sight when watching news regarding the stock market.
What Happens at the BSE?
Simply put, BSE is a place where investors can trade shares in companies. It acts like a huge virtual shopping center where:
- Companies offer shares of their business for sale
Prices change on stocks as people want them and as they have them.
But it’s not only stocks. It also handles derivatives, bonds, funds working together, exchange-traded funds (ETFs), instruments of debt.
What does the BSE do?
Let’s say for instance a business would need the funding to expand. When the company proceeds to offer a share of its stocks to the public in exchange for money and gets these shares listed on BSE. The interested buyers can purchase the shares once listed.
And day after day, they sell these shares on the BSE. Prices fluctuate every second depending on how many buyers there are; as they put it, the higher the price.
Everything is electronic and done “Quick ‘n Safe.” BSE is one of the fastest in the world, with response times as good as 6 microseconds.
The Sensex is known as a ‘barometer’ of investor fortunes in India
Because it represents thirty different industrial sectors that account for the greater part of the capital market. The Bombay Stock Exchange's broader index, which includes hundreds of companies, gives a better idea of how the Indian economy is doing.
Some well-known companies forming part of Sensex include:
- Reliance Industries
- TCS
- HDFC Bank
- Infosys
- ICICI Bank
What makes BSE important?
It makes jobs by helping businesses get money to grow, come up with new ideas, and hire more people.
5. Making money for the Investors
It makes money for the people and businesses that invest their money in things and grow their wealth.
6. Economic Indicator
The BSE is an indicator of how well the Indian economy is. It’s something that governments, economists, and investors keep a close eye on.
7. Creating job
BSE supports about million jobs, which are fed by the financial industry and companies listed on it.
5. Transparency and Trust
BSE is regulated by the likes of the SEBI, which is meant to bring fairness and keep things safe for investors in the capital.
Innovation and Achievements
BSE is known as a pioneer in many activities:
- Asia’s First Stock Exchange
- Fastest stock exchange in the world regarding transaction speed
The Indian share market registers another pioneering contribution of the BSE STAR MF by facilitating buying and selling of mutual funds over the internet.
BSE STAR MF is a system where one can buy and sell mutual funds.
It is also the first stock exchange to be listed in India.
How BSE is different from NSE?
India has two major stock exchanges:
- BSE - Bombay Stock Exchange is the oldest stock exchange.
- National Stock Exchange (NSE) started in 1992.
Both have a difference in certain activities: NSE is more famous in derivative trading. Still, BSE is still in the game and commonly used especially during IPOs, mutual funds, and investments for a long time.
Final Thoughts
Bombay Stock Exchange is not just a place to do trading of shares it is one name, which registers the phenomenon of economic growth happening in India. It joins hands of businesses with investors; it brings money from all over the world to India and helps millions of people do planning for their financial future.
You could be a young investor or merely interested to know more, keep an eye on BSE, and understand its functioning to wisely invest your money. Who knows; it could be your business on the BSE one day!