Financial Daily from THE HINDU group of publications
Friday, Mar 22, 2002
Financial Daily from THE HINDU group of publications Friday, Mar 22, 2002 |
|
|
|
|
|
Markets
-
Stock Exchanges BSE deliberates on free-float index Our Bureau
MUMBAI, March 21 SHOULD the Sensex be made into a free float index? The concept although novel, had few takers in the capital markets. At the round table conference on free float index at the Bombay Stock Exchange today, many stakeholders, including fund managers, analysts and investors in the stock market, deliberated on the pitfalls of making the benchmark index, a free float index. Free Float may be defined as that portion of equity capital of a company that is held by non-promoters and thereby available for trading by investors. The free float based index is an equity index that is calculated using only the free-float market capitalisation of its constituent companies. Currently, there are about seven companies that have 100 per cent non-promoters stake, which could essentially make them free floats. These scrips include State bank of India, BSES and ITC among others. The panelist included Mr Vineet Bhatnagar, MD, Refco India , Mr U.R. Bhat, CIO, Jardine Fleming Asset Management, Mr N. Parakh, Chief General Manager, SEBI, Mr Bharat C. Shah, Chief Investment Officer, Birla Sunlife AMC, Dr. Manoj Vaish, Deputy Executive Director, BSE, and Mr Krishnamurthy Vijayan, CEO, JM Mutual Fund. Mr Mark Makepeace, Chief Executive, FTSE Group was the moderator. According to Mr Bhat, although there is support for the concept, a duration of six months will be required to make the adequate changes. Presently, only index funds prefer a free-float index. But index funds form just two per cent of the total equity market. BSE's Teck index is the only one to be based on free-float index concept. ``All other Indian indices are based on full-market capitalisation methodology. However, a move towards free-float globally has generated a demand for free-float based benchmarks in India,'' said Dr Vaish.
Send this article to Friends by E-Mail
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |
Copyright © 2002, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|