The birth of ‘Sensex’, and its 37-year journey to 64,000 points
时间:2024-06-26 18:10:55 阅读(143)
The BSE Sensex, the headline stock market index in India, has had quite a journey since its inception. Sensex is a key benchmark in the Indian stock market; the index has a significant impact on investor sentiment and overall economic outlook. From its birth in January 1986 with the trading levels of about 550 points, to reaching its all-time high of over 64,000 points today in 2023, Sensex has managed to maintain its boom, despite having a sharp decline in the 2008 financial crisis and the 2020 pandemic.Origin of the word ‘Sensex’
Coined by stock market analyst Deepak Mohoni, the term ‘Sensex’ is a combination of ‘Sensitive’ and ‘Index’. The term reflects the stock market’s sensitivity, where even small events can significantly impact stock prices. Sensex is calculated using the free-float market capitalization-weighted methodology. It captures the price movement of the most actively traded stocks on the Bombay Stock Exchange (BSE).
The late 1990s saw a global technology boom, impacting the Indian stock market. The Sensex crossed the 5,000 mark in October 1999. However, the subsequent Y2K crisis and dot-com bubble caused a major correction. During the 2008 global financial crisis, the Sensex faced significant challenges. It experienced a sharp decline, reaching a low of 8,160 points in October 2008. The crisis had a severe impact on the Indian share market, causing widespread panic and investor losses. However, the index and broader markets recovered from the 2008 lows.
Sensex’s milestonesSensex has bagged quite a few notable milestones as well. Sensex crossed the 20,000 mark for the first time in December 2007, reflecting the growing strength of the Indian economy. In January 2021, the Sensex crossed the 50,000 mark for the first time, a historic milestone. Continuing its upward trajectory, Sensex reached the 60,000 mark in September 2021, further cementing its significance in the Indian stock market.
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- AMC”.
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In its consultation paper, Sebi has suggested that trustees of mutual funds should focus on market abuse by AMC, its employees and mis-selling by the AMC to increase the asset base.
Also, trustees should be responsible for fairness of fees and expenses charged by the AMC, compare its performance with peers and ensure that AMC’s sponsor is not getting any undue advantage.
In addition to the core areas, the trustees should be responsible for periodically reviewing the steps taken by AMCs for the folios which do not contain all KYC attributes with bank details.
Further, Sebi has suggested that trustees and their resource persons should independently evaluate the extent of compliance by AMC and not merely rely on AMC’s assurances.
To facilitate trustees’ supervision, AMCs should provide them with analytical information.
Presently, the trustees primarily rely on the AMCs for ensuring compliance with the applicable rules.
Under the rules, trustees hold the property of the mutual fund in trust for the benefit of the unitholders. The trustees appoint an AMC to float schemes for the mutual fund and manage the funds mobilised under various schemes, in accordance with the investment objectives.
“In view of the increasing scale and reach of the mutual fund industry, trustees’ role in respect of unitholders’ protection assumes even greater significance,” Sebi said on Friday.
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Over the past decade there has been a five-fold increase in the size of the mutual fund industry. The assets under management (AUM) has surged from Rs 7.93 lakh crore in November 2012 to Rs 39.89 lakh crore in December 2022.
To ensure that trustees devote time and attention to their core responsibilities, Sebi has suggested that for fulfilling other responsibilities, trustees may rely on professional firms such as audit firms, legal firms, merchant bankers for carrying out due diligence on their behalf.
The Sebi also listed some duties trustees can delegate to AMCs. This include ensuring that all systems are in place prior to the launch of any scheme by the AMC, and calculating any income in the mutual fund due to the fund and any income received in the mutual fund for unitholders.
The regulator has proposed to provide a one year time to existing trustees with board of trustee structure to convert into a trustee company, from governance point of view.
Presently, two structures for trustees are permitted — corporate and board of trustees structure. Moreover, there are a few mutual funds which have the board of trustees structure while the trustees of all other mutual funds have adopted the structure of a trustee company.
Considering the enhanced role of trustees over the period of time, Sebi has suggested to increase the minimum number of trustees to adequately perform their functions. Presently, the minimum number of trustees prescribed is four.
Also, it has been proposed that the chairperson of the trustee company should be an independent director.
Sebi has suggested that apart from the meeting of the audit committee of AMCs and trustees (which mostly comprises of independent directors), the board of AMCs and the board of trustees may be mandated to meet at least once a year to discuss the issues concerning the mutual funds.
The regulator proposed that the existing MF Regulations on AMC and its obligations may be amended to include additional clauses with respect to the obligations of the board of AMC.
The proposed amendment may include a clause which casts an obligation on the board of AMC to ensure that all the activities of the asset management company are in accordance with the provisions of these regulations.
The Securities and Exchange Board of India (Sebi) has sought comments from public till February 24 on these proposals.