Banking and Financial News – 18 May 2014

Over 30 entities under Sebi lens for unusual trading on 16 May (Mint) - More than 30 entities, including brokers and high net worth individuals (HNIs), have come under the scanner of market watchdog Securities and Exchange Board of India (Sebi) for unusual trading activities on the day of Lok Sabha election results. The market regulator is gathering information about such transactions from its Integrated Market Surveillance System (IMSS). Earlier sources had said that trends in overseas markets and factors affecting foreign institutional investors (FIIs) were also being monitored continuously.

On 16 May, the 30-share BSE Sensex, which had gained over 1,560 points in five sessions previously, had surged 1,470 points to hit a new life-time high of 25,375.63 in early trade fuelled by hopes that BJP government would fast-track reforms and accelerate economic activity. The Sensex ended the day at a new closing peak of 24,121.74 points.

Important Financial Terms in the News explained.

A high-net-worth individual (HNWI or HNI) is a person with a high net worth. These individuals typically are defined as having investable finance (financial assets not including primary residence) in excess of US$1 million. At the end of 2013, there were just over 13 million HNWIs in the world. The United States of America had the highest number of HNWIs (just over 4 million) of any country.

FII (Foreign Institutional Investor) used to denote an investor, mostly in the form of an institution. An institution established outside India, which proposes to invest in Indian market, in other words buying Indian stocks. FIIs generally buy in large volumes which has an impact on the stock markets. Institutional Investors includes pension funds, mutual funds, Insurance Companies, Banks, etc.

SEBI – Securities Exchange Board of India is the regulator for the Securities Market in India. Originally set up by the Government of India in 1988, it acquired statutory form in 1992 with SEBI Act 1992.

Share Indices - SENSEX and NIFTY - SENSEX is short term for "Sensitive Index" and is associated with the Bombay Stock Exchange (BSE). An index is basically an indicator.

The S&P BSE SENSEX (S&P Bombay Stock Exchange Sensitive Index), also-called the BSE 30 or simply the SENSEX, is a free-float market-weighted stock market index of 30 well-established and financially sound companies listed on Bombay Stock Exchange. S&P BSE SENSEX is regarded as the pulse of the domestic stock markets in India. The base value of the S&P BSE SENSEX is taken as 100 on 1 April 1979, and its base year as 1978–79. The term “S&P” was added in the name from Feb 2013, when the global credit rating agency Standard & Poors entered into a technical tie up with BSE. (Earlier, S&P had a similar tie up with National Stock Exchange.)

The CNX Nifty, (Also called the Nifty 50 or simply the Nifty), is National Stock Exchange of India's benchmark index for Indian equity market. 'CNX' in its name stands for 'CRISIL NSE Index'. The CNX Nifty index is a free float market capitalisation weighted index. The base period for the CNX Nifty index is November 3, 1995. The base value of the index has been set at 1000. The CNX Nifty currently consists of the following 50 major Indian companies.

Personalities

• SEBI chairman - U.K. Sinha

Short Forms / Acronyms

• BSE – Bombay Stock Exchange

• Sensex – Sensitive Index

• FII - Foreign Institutional Investor

• HNI – High Networth Individual

• SEBI - Securities and Exchange Board of India

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Courtesy : The Mint