MCX-SX started trading in the shares of 1,116 listed companies compared to 1,665 firms on the National Stock Exchange and 5,191 companies on the Bombay Stock Exchange.
The MCX-SX benchmark index - christened SX40 - is equivalent to the BSE Sensex and the NSE Nifty. The SX-40 index is designed to measure the economic performance with better representation of various industries and sectors based on ICB, a leading global classification from Britain's FTSE-100.
Constituents of SX40: ACC, Ambuja Cements, Asian Paints, Bajaj Auto, BPCL, Bharti Airtel, BHEL, Cairn India, Cipla, Coal India, Dr Reddy's, Gail (India), HCL Tech, HDFC Bank, HDFC, Hero MotoCorp, Hindalco, HUL, ICICI Bank, Infosys, ITC, JP Associates, JSPL, L&T, Lupin, M&M, Maruti Suzuki, NTPC, ONGC, Power Grid Corp, RIL, Sun Pharma, TCS, Tata Motors, Tata Power, Tata Steel, Titan Industries, United Spirits, Wipro, and Zee Entertainment.
The SX40 is a free float (shares that are readily available for trading) based index of 40 large-cap and liquid stocks. It includes companies that have a minimum free float of 10 per cent and are within the top 100 liquid companies. Globally, Britain's FTSE has a 25 per cent free float criterion while the US S&P 500 has a 50 per cent free float criterion.
The weight of the largest constituent on the SX-40 is 9.4 per cent as compared to 8.8 per cent (ITC) on the Nifty and 10.3 per cent (ITC) on the Sensex. The top 10 stocks account for a 62.4 per cent weightage on the SX-40 as compared to 57.4 per cent on the Nifty and 67.8 per cent on the Sensex.
The base value of the SX-40 is 10,000 and its base date is March 31, 2010. The SX-40 has given returns of 16.3 per cent from 2010-January 31, 2013, against 15 per cent on the Nifty and 13.5 per cent on the Sensex.
The SX-40 has an industry cap at 20 per cent (+/- 2 per cent band). This means stocks from a particular industry cannot have over 20 per cent weightage in the index. There is no industrial cap in the composition of the Nifty.
Industry wise weightage: Financials (22 per cent), consumer goods (18.2 per cent), industrials and oil & gas (both 14.8 per cent), tech (14.2 per cent), healthcare (5.1 per cent), basic materials (4.7 per cent), utilities (3.1 per cent), telecom (2.4 per cent) and consumer services (0.7 per cent).
MCX-SX is in direct competition with the NSE, India's biggest stock exchange by volumes and turnover, and the BSE, which is India's oldest bourse. To take on the two, MCX-SX offered a 50 per cent discount on transaction charges to new members, attracting many proprietary derivative traders. Of the 700 membership applications received by MCX-SX, 405 applications have been already registered with market regulator SEBI.
Key challenges: Stock exchanges thrive on volumes and MCX-SX hopes that volumes will grow substantially in the coming years. The value of shares traded in India remain a fraction of global exchanges, but the government's recent initiatives to boost mutual fund and insurance investments in a bid to bring more retail investors into the stock markets will help MCX-SX.
(With inputs from Reuters)