Shubhojit Chatterjee asks “Can you please help us to know how to trade in Sensex as we are trading through ICICI Direct and they don’t have access to NSE”.

First lets review what an indexed mutual fund is. Indexed funds are an investment vehicle that aims to replicate movements of an index of a financial market such as NSE or BSE. For Indian investors that means a fund that will do as well or as poorly as the SENSEX or Nifty. These indexed funds will own all the securities of that index. So, for SENSEX index fund that means owning shares in all 30 companies that make up the index. Its usually a computer model that drives this fund not human stock picking. This also means lower management costs and fees because its mostly automated.

For the Indian market however the indices are fairly narrow so you dont actually get to capture the broad market, but a basket of stocks. (Editorial note: you would have done well though in the last 9 months!).

 Here is a list of (maybe not complete) of Index funds that track the SENSEX:

1. HDFC funds

2. Franklin India BSE Sensex Fund & Nifty fund

3. Tata SENSEX fund

4. LIC MF Index Fund SENSEX & Nifty

5. UTI Master Index plan

Over the past few years funds that tracked Nifty have had a better risk / reward return (beta) than those that tracked SENSEX, since the Sensex is more volatile, and most funds that track the Sensex dont do as good a job as those that do Nifty.

1. Reliance Mutual Funds

2. HDFC

3. Fidelity

4. Franklin Templeton

5. ABN Amro

6. AIG

7. Bank of Baroda

8. Birla Sun Life

9. Canara Bank

10. DBS Chola Mandalam AMC

11. DSP Merrill Lynch

12. Deutsche Bank

13. Escorts Mutual

14. HSBC

15. ICICI Prudential

16. ING

17. JM Financial

18. JP Morgan

19. Kotak Mahindra

20. LIC

21. Lotus India

22. Morgan Stanley

23. Principal

24. Quantum

25. State Bank of India (SBI)

26. Sahara Mutual Funds

27. Standard Chartered

28. Sundaram BNP Paribas

29. Tata

30. Taurus Mutual Funds

31. UTI

32. Benchmark Funds

1. Trading Volume:

1984: US $3M / daily,

1994: US$100 Million,

2007: 8 Billion / daily ($6B in derivatives)

2. Assset Management Companies:

1994: 10, Total Funds ~ 100

2007: 32, Total Funds ~1000

3. Best Mutual fund companies in India

DSP Merrill Lynch

Fidelity Mutual Funds

Frankling Templeton Funds

HDFC Mutual Funds

Sundaram BNP Paribas Mutual Funds

Source: Personalfn.com

1. Yahoo Finance India

2. ANI

3. Business Week India

4. Business Wire India

5. CNBC TV 18 Live

6. Financial Express

7. Hindustan Times

8. Rediff Business News

9. CNN IBN Live (Live Streaming of IBN)

10. India Times Economic Times

11. Personal FN

12. Equity Master

13. Reuters News India

1. Avatar

2. Hudson Fairfax Group

3. India Deep Value Fund

4. Fair Value Capital

5. Indea Capital

6. India Capital Fund

7. Monsoon Capital

8. Karma Capital Management

9. Atlantis Investment Management

10. Naissance Jaipur (India) Fund

11. Quantum Asset Fund

D&B India has a great report on the leading Equity brokerage firms in India. Over 394 firms are listed by Size, Total Terminals, Sub brokers, Total Employees, Branches, Cities of operation and Offerings. Some excerpts:

For the broking industry, we started with an initial database of over 1,800 broking firms that were contacted, from which 464 responses were received. The list was further short listed based on the number of terminals and the top 210 were selected for profiling. 394 responses, that provided more than 85% of the information sought have been included for this analysis presented here as insights. All the data for the study was collected through responses received directly from the broking firms. The insights have been arrived at through an analysis on various parameters, pertinent to the equity broking industry, such as region, terminal, market, branches, sub brokers, products and growth areas. 

Some key characteristics of the sample 394 firms are:

• On the basis of geographical concentration, the West region has the maximum representation of 52%. Around 24% firms are located in the North, 13% in the South and 10% in the East
• 3% firms started broking operations before 1950, 65% between 1950-1995 and 32% post
  1995
• On the basis of terminals, 40% are located at Mumbai, 12% in Delhi, 8% in Ahmedabad, 7% in Kolkata, 4% in Chennai and 29% are from other cities
• From this study, we find that almost 36% firms trade in cash and derivatives and 27% are into cash markets alone. Around 20% trade in cash, derivatives and commodities
• In the cash market, around 34% firms trade at NSE, 14% at BSE and 52% trade at both exchanges. In the derivative segment, 48% trade at NSE, 7% at BSE and 45% at both, whereas in the debt market, 31% trade at NSE, 26% at BSE and 43% at both exchanges
• Majority of branches are located in the North, i.e. around 40%. West has 31%, 24% are located in South and 5% in East
• In terms of sub-brokers, around 55% are located in the South, 29% in West, 11% in North and 4% in East
• Trading, IPOs and Mututal Funds are the top three products offered with 90% firms offering trading, 67% IPOs and 53% firms offering mutual fund transactions
• In terms of various areas of growth, 84% firms have expressed interest in expanding their institutional clients, 66% firms intend to increase FII clients and 43% are interested in setting up JV in India and abroad
• In terms of IT penetration, 62% firms have provided their website and around 94% firms have email facility

1. Almondz

2. Emkay Research

3. India Infoline

4. PINC Research

5. Motilal Oswal

6. Prabhudas Liladhar

7. Citigroup India

8. DSP Merrill Lynch

9. JP Morgan Equity

10. CLSA

11. Morgan Stanley

 12. IL&FS Investsmart

13. Religare, Religare Securities and Religare Online

14. HDFC Securities

15. SSKI

16. ENAM Edelweiss Research

17. ICICI Securities

18. Pranav Securities

19. Sharekhan

20. KJMC

21. Karvy

22. Deutsche Bank

23. Prime Broking

24. Goldman Sachs

25. P-Securities

26. Angel Broking, Angel Trading

27. SSKI

28. Ambit Capital

29. Finquest Securities

30. UBS Investment

31. IDBI Capital

32. Macquarie Research

33. Asit C. Mehta Research

34. Bajaj Capital

35. Kotak Securities

36. Dolat Capital

37. UTI Securities

38. IL&FS Investsmart

39. Enam Securities

40. ABN Amro

41. ASK Securities

42. Networth

43. Khandwala Securities

44. ASK Raymond James

45. HSBC

46. Anand Rathi

47. Ventura Securities

48. Niche Research

49. Antique Stock Broking

50. Asian Market Securities

51. Man Financial

52. KR Choksey Research

53. Indiabulls Research

54. SPA Research

55. SKP Securities

56. Keynote Capitals

57. Brics Securities

30 companies make up the most watched index in India – the SENSEX (SENSitive IndEX). These are the largest capitalized companies.

National Stock Exchange (NSE) started trading in the equities segment (Capital Market segment) on November 3, 1994. There are 1,319 companies listed on NSE as of September 2007. List of most active stocks onthe NSE, is a who’s who list of Indian companies.

Bombay Stock Exchange Limited is Asia’s oldest stock exchange. It carries within itself the depth of knowledge of capital markets acquired since its inception in 1875. Located in Mumbai, the financial capital of India, it has been the backbone of the country’s capital markets.

There are several indices that measure BSE.

Stocks traded on the Exchange have been classified into ‘A’, ‘B1′, ‘B2′,’T', ‘S’, ‘TS’ ‘F’ ,’G’ and ‘Z’ groups.

The Exchange has for the guidance and benefit of the investors have classified the scrips in the Equity Segment into ‘A’, ‘B1′, ‘B2′,’T', ‘S’, ‘TS’ and ‘Z’ groups on certain qualitative and quantitative parameters which include number of trades, value traded, etc.

The “F” Group represents the Fixed Income Securities.

The “T” Group represents scrips which are settled on a trade to trade basis as a surveillance measure.

The “S” Group represent scrips forming part of the “ BSE-Indonext” segment .

The “TS” Group consist of scrips in the “ BSE-Indonext” segment which are settled on a trade to trade basis as a surveillance measure.

Trading in Govt. Securities for retail investors is done under “G” group.

The ‘Z’ group was introduced by the Exchange in July 1999 and includes the companies which have failed to comply with the listing requirements of the Exchange and/or have failed to resolve investor complaints or have not made the required arrangements with both the Depositories, viz., Central Depository Services (I) Ltd. (CDSL) and National Securities Depository Ltd. (NSDL) for dematerialization of their securities.

The Exchange also provides a facility to the market participants for on-line trading of odd-lot securities in physical form in ‘A’, ‘B1′, ‘B2′ ‘T’,'S’, ‘TS’ and ‘Z’ groups and Rights renunciations in all the groups of scrips in the Equity Segment.