Millennium Post

Sensex to have only ‘BSE 100’ firms from June

The 30 companies in the Sensex will be derived only from the BSE 100 segment from June onwards, Asia Index, a BSE and S&P Dow Jones Indices joint venture, said on Tuesday. At present, all common equities listed on the BSE are considered eligible. However, it excluded companies classified in Z group, listed mutual funds, firms suspended on the last day of the month prior to review date, the ones objected to by BSE’s surveillance department and those traded under a permitted and SME category. In a circular, Asia Index said, “S&P BSE Sensex will be derived from S&P BSE 100.” The new methodology will become effective from June 2016. S&P BSE Sensex, first compiled in 1986, was calculated on a “market capitalisation-weighted” methodology of 30 component stocks representing large, well-established and financially sound companies across key sectors.

Since September 2003, this is being calculated on a free-float market capitalisation methodology. The free-float market capitalisation-weighted methodology is a widely followed index construction methodology on which majority of global equity indices are based. All major index providers like MSCI, FTSE, STOXX, and Dow Jones use the free-float methodology.
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