Asia Index Private Limited (AIPL), the joint-venture between S&P Dow Jones Indices and Bombai Stock Exchange (BSE), is set to launch the S&P BSE AllCap Index Family in the second quarter of 2015, in response to the market need for a broad benchmark index that will help measure the performance of the Indian equity market and provide new opportunities for index-linked solutions.
The S&P BSE AllCap Index will be divided into five size-based indices including LargeCap, MidCap and SmallCap using total market capitalisation and ten sector-based sub-indices. Certain existing BSE indices will be replaced by the new indices.
The Indian equity market, said Alka Banerjee, chief executive of AIPL, has been one of the top performers among emerging economies. “Hence, there is a strong need to effectively measure its performance across sectors and market segments that can truly represent its breadth and depth,” he said in a statement.
The size-based indices’ stock selection conforms to S&P Dow Jones Indices’ global methodology of 70%/15%/15% composition in large-, mid- and small-cap, while the sector indices are as per the 10 broad economic sectors as identified by BSE. All 16 indices will be calculated in Indian rupees (INR) and in US dollars (USD), “helping foreign investors to measure market performance after incorporating exchange rate (INR/USD) movements”.
The S&P BSE AllCap Index is a broad index covering more than 95% of the total market capitalisation and comprising more than 700 stocks that are listed on the BSE. It will be useful for broad market measurement, while the five size-based indices and ten sector indices will offer investors a tool to analyse market movements across size or sectors.
In addition to the S&P BSE AllCap Index, AIPL will launch the S&P BSE LargeCap, S&P BSE MidCap, S&P BSE Large MidCap, S&P BSE SmallCap and S&P BSE MidSmallCap, as well as ten sector indices.
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