Bd Stock Indices

In: Business and Management

Submitted By reazuliqbal
Words 705
Pages 3
Index is a statistical method of measuring change in an economy or security market as whole or in parts over time. Each index has its own calculation methodology and is usually expressed in terms of a change from a base value. Thus, the percentage change is more important than the actual numeric value.

Classification of Index
✔ Equity indices
• • • • • Broad market index Multi-market index Mult-market index with fundamental weighting Sector index Style index

✔ Fixed income indices ✔ Indices for alternative investment
• • • Commodity indexes Real estate indexes Hedge fund indexes

Index Weighting Methods
✔ Price Weighted Index: A stock index in which each stock influences the index in proportion to its price per share. The value of the index is generated by adding the prices of each of the stocks in the index and dividing them by the total number of stocks. Stocks with a higher price will be given more weight and, therefore, will have a greater influence over the performance of the index. ✔ Capitalization Weighted Index: A type of market index whose individual components are weighted according to their market capitalization, so that larger components carry a larger percentage weighting. The value of a capitalization-weighted index can be computed by adding up the collective market capitalization of its members and dividing it by the number of securities in the index. ✔ Float-adjusted Market Capitalization Weighted Index: Its like market capitalization weighted index. The weights are based on the proportionate value of each firm's shares that are available to investors to the total market value of the shares of index stocks that are available to investors. Firms with relatively large percentage of their shares held by controlling stockholders will have less weight than they have in an unadjusted marketcapitalization index. ✔ Equal Weighted Index: A type of…...

Similar Documents

Co Movement of Global Indices

...requirements of the courseMultivariate Statistical Methods | Co movement of Global Stock Market Indices | | | | Name: Abhisek Rathi Matriculation Number: 22030512 Submitted To: Prof. Dr. Frank Brand Submission Date: December 17, 2012 Contents Introduction 3 Stock Market Co-Movement 4 Causes 4 Data Analysis 6 Observations 9 Implications 10 References 12 Introduction The global financial crisis of 2008 was the biggest economic crisis faced by the world since the great depression of 1929. The crisis started to brew in the US in 2007 and many believed it would be largely limited to the shores of the US. However, the collapse of Lehman Brothers in 2008 was sufficient to trigger a worldwide stock market collapse, the effects of which are felt to this day. The worldwide collapse of stock market can be understood by considering the world as a single big marketplace. Analysing the co-movement of various financial markets has gained importance in the recent past both for policy makers, in terms of policy co-ordination, and portfolio managers, for portfolio diversification. For policy makers, high co-movement would facilitate transition in local currency areas resulting in potential efficiency gains from stock market merger activities. This, in turn, will result in greater financial stability across the regions. However, for portfolio managers, high correlation between international stock markets would reduce the benefits of portfolio......

Words: 2889 - Pages: 12

Indices Financieros

...ncieros ÍNDICES FINANCIEROS (“RATIOS”) Al igual que las pruebas de laboratorio que ordena un médico a su paciente durante una revisión anual de salud, con el objetivo de establecer el nivel general de salud de dicho paciente, el cómputo de los índices financieros le permite al analista financiero tener una mejor idea acerca de la “salud” operacional y financiera de la entidad objeto de dicho análisis. Análogo a las categorías que existen dentro de las pruebas de laboratorio (niveles de lípidos, enzimas, etc.), los índices financieros también se dividen en categorías dependiendo del aspecto que se pretende evaluar. Más adelante revisaremos las principales categorías de índices, y presentaremos los principales índices dentro de cada categoría. Aunque parezca demasiado elemental, es importante recordar que los índices financieros son fracciones, donde su numerador y denominador provienen de datos financieros obtenidos de los estados financieros, tanto del estado de situación, estado de ingresos y gastos, y estado de flujos de efectivo. Por consiguiente, al cambiar dichos datos financieros a lo largo del tiempo, se alterarán los índices que resultan del cambio en los datos usados para computar los mismos. Siendo fracciones, los índices pudiesen cambiar de un período contable a otro de dos formas distintas: Aumentar – este sería el caso si tanto el numerador en el índice aumenta, si el denominador disminuye, o ambos efectos combinados. Disminuir - este sería el caso......

Words: 972 - Pages: 4

Reasons for Stock Market Crash Bd

...Bangladesh stock market faces biggest crash in 55 years. If we would recall, Dhaka Stock Exchange Gen. Index (DGEN) soared to its highest levels from October to December last year, with the peak on Dec. 5, 2010 at 8,918 points. DSE’s index on Jan. 3, 2010 was at 4568.40 and went up at a staggering 4,350 points or 95.23% increase! But 2weeks ago, Jan. 10, 2011, trading on the Dhaka Stock Exchange was halted after it fell by 660points, or 9.25%, in less than an hour, the biggest one-day fall in its 55-year history. Reasons for Stock Market Crash: 1. Bangladesh was having current account surpluses (huge remittance flows). So more money was coming in than going out. It made a situation that lots of people had money in their hands. Rather keeping money at banks, they invested that money in Stock Market. Because you can earn more in a short period of time. 2. Interest rates went down. So, it was not a good idea to get around 8.5% interests per year (before tax) when inflation was around 5-7%.So suddenly, people had a lot of idle money which they were unable to invest anywhere. Anywhere except the stock market that is. Thus the joyride of equities (stocks) began and that situation is still continuing. Because of this excess flow of funds by both general investors as well as institutions (Banks, NBFI's and Insurance companies), multiple attempts by the regulator failed to cool down the market. No alternative investments were available. Plus, when you can earn 30%......

Words: 675 - Pages: 3

Forecasting with Indices

...Forecasting with Indices Forecasting is a tool that a company can use to predict trends or patterns based on the data available from previous years, quarters or periods. Forecasting can assist a company with a wealth of information, such as where cuts need to be made, where increases need to be made. Forecasting can even aid a company with what product to carry or discontinue and when would be a good time for a sale. Calculating Averages Taking the monthly sales for the last four years of Honda’s sales, the author entered this information into Excel, and formulated this chart: | Year | Year | Year | Year | average by month | Month | 1 | 2 | 3 | 4 | monthly index | 1 | 98,511 | 71,031 | 67,479 | 76,269 | 78,323 | 2 | 115,397 | 71,575 | 80,671 | 98,059 | 91,426 | 3 | 138,734 | 88,379 | 108,262 | 133,650 | 117,256 | 4 | 135,180 | 101,129 | 113,697 | 124,799 | 118,701 | 5 | 167,997 | 98,344 | 117,173 | 90,773 | 118,572 | 6 | 142,539 | 100,420 | 106,627 | 83,892 | 108,370 | 7 | 138,744 | 114,690 | 112,437 | 80,502 | 111,593 | 8 | 146,855 | 161,439 | 108,729 | 82,321 | 124,836 | 9 | 96,626 | 77,229 | 97,361 | 89,532 | 90,187 | 10 | 85,864 | 85,502 | 98,811 | 98,333 | 92,128 | 11 |......

Words: 746 - Pages: 3

Forecasting Indices

...Forecasting with Indices Christopher L Kearney University of Phoenix QRB/501 Quantitative Reasoning for Business Maryam Boluri May 2, 2011 Forecasting with Indices This writer will begin by defining forecast and index while detailing the importance of both as they relate to the makeup of any company. This type of data can be financial or non-financial depending on what the company offers. Forecasting is a method used by companies to predict current and future trends. Many companies have realized this to be the backbone of the company because it predicts whether or not a company will break even and if a company does not break even decided whether the company will be up and running the following year. An index is a point of reference concerning numbers with common points. Indices are used to observe historical and short-term comparisons with percentages change commonly used. This week’s lesson entailed obtaining the Summer Historical Inventory Data from the materials area in the week two forum and converting the information into an index. The time series information is to be used to forecast the inventory needed for the upcoming year. To give a company a better view of making decision a month-to-month forecast is best because more information can be obtained over a shorter period. The Summer Historical Data obtained from University of Phoenix Material was converted into an index using Microsoft excel software. The data showed typical demand for summer highs......

Words: 489 - Pages: 2

Market Indices in India

...MARKET INDICES IN INDIA INTRODUCTION A stock market index is created by selecting a group of stocks that are capable of representing the whole market or a specified sector or segment of the market. The change in the price s of this basket of securities is measured with reference to a base period. There is usually provision for giving proper weights to different stocks on the basis of their importance to the economy. A stock market index acts as the indicator of the performance of the overall economy or a sector of the economy. An Index is used to give information about the price movements of products in the financial, commodities or any other markets. Financial indexes are constructed to measure price movements of stocks, bonds, T-bills and other forms of investments. Stock market indexes are meant to capture the overall behaviour of equity markets. Stock market indexes are useful for a variety of reasons. Some of them are: • They provide a historical comparison of returns on money invested in the stock market against other forms of investments such as gold or debt. • They can be used as a standard against which to compare the performance of an equity fund. • It is a lead indicator of the performance of the overall economy or a sector of the economy • Stock indexes reflect highly up to date information • Modern financial applications such as Index Funds, Index Futures, Index Options play an important role in financial investments and risk management Further...

Words: 5256 - Pages: 22

Indice Precios

...IPC Índice de precios y cotizaciones es el principal índice bursátil de la bolsa mexicana de valores, tiene las 35 emisoras con más liquidez en este mercado. Tiene sus bases desde octubre de 1978 y tiene como principal objetivo el constituirse como un indicador altamente representativo y confiable del Mercado Accionario Mexicano. Mide la evolución del mercado primario en su conjunto, este índice refleja cuanto ganó o perdió la Bolsa Mexicana de Valores en su jornada. Es elaborado diariamente por la Bolsa Mexicana de valores con base en los resultados de la sesión cotidiana, y tomando como referencia las 35 emisoras principales de los distintos sectores de la economía La revisión de la muestra se lleva a cabo en forma anual (en el mes de febrero), considerando que la muestra se mantendrá estable durante este periodo. ¿Cómo se calcula el índice de precios y cotizaciones? Debido a la cantidad de acciones que emite la bolsa mexicana de valores es difícil determinar un precio promedio. Los puntos se calculan en función de las variaciones de precios de una selección de acciones, llamada muestra, balanceada, ponderada y representativa de todas las acciones cotizadas en la BMV. La muestra del índice accionario está integrado por las emisoras más representativas del sector accionario, éstas se seleccionan bimestralmente de acuerdo al nivel de bursatilidad de los títulos operados, el cuál toma en cuneta variables como: número de operaciones, importe negociado y días......

Words: 329 - Pages: 2

Stock Marker Crash Bd

...Stock market crash in Bangladesh in 2010-2011: * Introduction Stock market is one of the most important financial institutions of any economy as well as Bangladesh. It opens door for companies to raise huge amount of capital from a lot of individual investors inside & outside of a country. Investors participate voluntary to buy ownership of a company in the public market. It is said that stock market is an intermediary institution to adjust a gap between surplus units and deficit units of an economy. In these days for millions of middle class educated people in Bangladesh investing in stocks is more popular than investing in any other investment sectors. For an investor, stocks are more liquid than any other investment sources as it gives ability to sell and buy ownership anytime without any hassle. Since 2007 share prices of Bangladesh stock market have been increasing steadily over the past four years and it outperformed almost all the world´s markets (Amadeo, 2012). The financial year 2008-09 is known for the global financial and economic crisis. Many developed and developing countries fall into recession. However, it could not affect Bangladesh economy greatly. So, the stock market of the country did not see any significant changes or fall. As CPD (2011) reported, financial year 2008-09 was a volatile year but during this year Bangladesh economy benefited from low prices of import-able and was able to avoid negative pressure on its export of goods and services...

Words: 2956 - Pages: 12

Forcasting and Indices

...Forecasting and Indices Forecasting is a process in which statements or conclusions are made regarding the outcome of events that have not yet happened. Forecasting is predicting what the could look like. There are many examples of forecasting. Estimating or predicting can be referred to as formal statistical methods that employ time series, cross-sectional or longitudinal data. Forecasting can be use to estimate a wide variety of issues, weather related events, the use of resources, sales, profit or loss and even staffing needs for a particular project. Coupling these findings with good planning can give a company a good indication of what the future should look like. Forecasting can use many different methods. Evaluating your objectives and conditions relevant to the individual situations can help in choosing the correct method to use. Another option is to use several methods and compare or combine the results, as many times, there is no one “best” method. “The forecast error is the difference between the actual value and the forecast value for the corresponding period. where E is the forecast error at period t, Y is the actual value at period t, and F is the forecast for period t. Measures of aggregate error: Mean absolute error (MAE) Mean Absolute Percentage Error (MAPE) Mean Absolute Deviation (MAD) Percent Mean Absolute Deviation (PMAD) Mean squared error (MSE) Root Mean squared error (RMSE) Forecast skill (SS) Average of Errors......

Words: 352 - Pages: 2

Satisfaction Indices

...economic indicator based on modeling of customer evaluations of the quality of goods and services purchased in the United States and produced by both domestic and foreign firms with substantial U.S. market shares. ASCI interviews more than 80,000 Americans every year about the satisfaction from the products and services that they have consumed. It uses that in a model developed by University of Michigan to measure customer satisfaction. So, the methodology uses customer interviews and econometric modeling. Over the years, ACSI have been able to identify the industries and sectors that have been performing well, and the ones that are not. ACSI provides customer satisfaction for a company, which correlates with the financial performance and the stock price of the company. Moreover, as consumer spending account for 70% of GDP, it also correlates with GDP growth changes. Manufacturing good industries tend to score higher, as they require lower level of service. Companies that tend to improve quality fair better on the index than companies that tend to reduce price. It also provides the overall industrial satisfaction index, which is helpful especially in case of acquisitions. Strengths: Companies can use ACSI as a tool to optimize their customer satisfaction to drive customer loyalty. It benefits investors, who would like to know a relation between the company’s current position and the future position. Also, it helps the government by providing information on how best to......

Words: 1355 - Pages: 6


...weighting schemes exist. First, while most indices use capitalization-weighting, additional criteria are often taken into account, such as sales/revenue and net income (see the “Guide to the Dow Jones Global Titan 50 Index”, January 2006). Second, as an answer to the critiques of capitalization-weighting, equity indices with different weighting schemes have emerged, such as "wealth"-weighted (Morris, 1996), “fundamental”-weighted (Arnott, Hsu and Moore 2005), “diversity”-weighted (Fernholz, Garvy, and Hannon 1998) or equal-weighted indices. [edit] Indices and passive investment management There has been an accelerating trend in recent decades to create passively managed mutual funds that are based on market indices, known as index funds. Advocates claim that index funds routinely beat a large majority of actively managed mutual funds; one study[citation needed] claimed that over time, the average actively managed fund has returned 1.8% less than the S&P 500 index - a result nearly equal to the average expense ratio of mutual funds (fund expenses are a drag on the funds' return by exactly that ratio). Since index funds attempt to replicate the holdings of an index, they obviate the need for — and thus many costs of — the research entailed in active management, and have a lower churn rate (the turnover of securities which lose fund managers' favor and are sold, with the attendant cost of commissions and capital gains taxes). Indices are also a common basis for a related type...

Words: 605 - Pages: 3


...Executive Summary With the unpredictable markets that have occurred in the past few months there truly was no need to go to any amusement park because no ride could take you on as many bumps, twist and drops that this economy has taken us investors on. The Stock-Trac Simulation was a great educational tool which gives beginners in the online trading world basic knowledge and tools to help succeed in the “world’s largest casino”. Today’s world is globalized and what makes a smart investor is someone who knows all about the different and diverse markets and companies of the world. For this assignment we had to invest in different companies and exchanges from all around the globe. Since we were new to investing, this project seemed to be a little overwhelming at first glance and we knew we needed some assistance in researching domestic and international markets. By using Yahoo Finance and Google Finance, we got the help and resources needed to create a diversified portfolio investing in bonds, futures, and stocks. Everyday as we would do our research on certain stocks and other investments, we continued to notice frightening downward trends in world exchanges from NYSE to Shanghai Stock Exchange. We knew before we began trading that there was high volatility in today’s market and it seemed to be causing unpredictable changes in price. These trends were causing havoc on the markets and many companies ending up going bankrupt or were on their last life line. Since this was a......

Words: 3236 - Pages: 13

Forcasting with Indices

...each product (Fishbowl, 2012). The company sets two levels for the stock. The first is the level the managers know that they need to order, and the other is the level that the managers need to bring the stock back to. So if the top level was 15 and the bottom level was five the managers would order 10 more when the company hit five products left. This works to an extent but if the products were snow shovels, then keeping 15 on hand yearly would not make sense. The business would be losing valuable storage space. On the other hand this type of inventory system lets the company know exactly how much space is needed in the stock room. If the business knows that 15 of these products are the most that it will have the business will have this space designated for those products without crowding. Anyone can manage this system. Simply count how many products are on hand, if it is below the bottom level the managers could order X number to get back to the top level. This system poses one other problem, though, and the problem is the changing needs and wants of customers. If the business has 15 of an item but it takes five months to sell 10. The company would have to adjust the top level. Otherwise the company is wasting storage space. On the other hand, if the level is 15 and sells 10 in two weeks the business will run out before the shipment comes in. To use this system correctly the company would have to use indices on sales trends and to forecast future sales. Another useful......

Words: 1805 - Pages: 8

Forecasting with Indices

...Forecasting with Indices Jamie Prather QRB/501 April 23rd, 2012 Measuring the winter historical inventory data for the next 12 months consists of preparing a simple exponential forecast method to determine the method of simple average during the 12 separate indices. The forecast was processed by Running mean Absolute Deviation (RMAD) was computed by taking the average of two one-year-wide averages that are offset by one period relative to each other. Computing the ratio divided by the moving average in each period. Running sum of forecast errors were computed by taking the differences between the actual and the forecast demand for the periods being evaluated. | | | | | | Alpha | 0.2 | | | | Month | 1 | 2 | 3 | 4 | | Forecast | ABS Value | RMAD | RSFE | TS | 1 | | 39800 | 32180 | 62300 | 189,480 | 189,480 | | | | | 2 | 57350 | 64100 | 38600 | 66500 | 226,550 | 189480 | 37070 | 37070 | 37,070 | 1 | 3 | 15400 | 47600 | 25020 | 31400 | 119,420 | 196894 | 77474 | 114544 | -40,404 | -0.35274 | 4 | 27700 | 43050 | 51300 | 36400 | 158,450 | 181399.2 | 22949.2 | 137493.2 | -63,353 | -0.46077 | 5 | 21400 | 39300 | 31790 | 16800 | 109,290 | 176809.4 | 67519.36 | 205012.6 | -130,873 | -0.63836 | 6 | 17100 | 10300 | 31100 | 18900 | 77,400 | 163305.5 | 85905.49 | 290918 | -216,778 | -0.74515 | 7 | 18000 | 45100 | 59800 | 35500 | 158,400 | 146124.4 | 12275.61 | 303193.7 | -204,502 | -0.67449 | 8 | 19800 | 46530 |......

Words: 310 - Pages: 2

Largest Stock Exchange

...10 Largest Stock Exchanges from Asia, Europe, Africa and America: 1. Asia: i. Bombay Stock Exchange: The Bombay Stock Exchange is the oldest exchange in Asia. It traces its history to the 1850s, when four Gujarati and one Parsi stockbroker would gather under banyan trees in front of Mumbai's Town Hall. The location of these meetings changed many times, as the number of brokers constantly increased. The group eventually moved to Dalal Street in 1874 and in 1875 became an official organization known as 'The Native Share & Stock Brokers Association'. In 1956, the BSE became the first stock exchange to be recognized by the Indian Government under the Securities Contracts Regulation Act. The Bombay Stock Exchange developed the BSE SENSEX in 1986, giving the BSE a means to measure overall performance of the exchange. In 2000 the BSE used this index to open its derivatives market, trading SENSEX futures contracts. The development of SENSEX options along with equity derivatives followed in 2001 and 2002, expanding the BSE's trading platform. The equity market capitalization of the companies listed on the BSE was US$1 trillion as of December 2011, making it the 6th largest stock exchange in Asia and the 14th largest in the world.[1] The BSE has the largest number of listed companies in the world. As of December 2011, there are over 5,112 listed Indian companies and over 8,196 scrips on the stock exchange,[3] the Bombay Stock Exchange has a significant trading......

Words: 5456 - Pages: 22