Stock Index

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  • Topic: Stock market, Stock market index, S&P 500
  • Pages : 6 (1399 words )
  • Download(s) : 84
  • Published : February 12, 2010
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Introduction:

Stock index is very much important leading indicator which can be used for several purposes. It can be used as a benchmark to judge the performance of professional money managers. It can be used to facilitate the establishment and maintenance of several types of index fund and exchange traded fund (ETF). Securities analysts, portfolio managers, and academicians doing research use stock market indexes to examine the factors that influence aggregate security price movements and to compare the risk-adjusted performance of alternative asset classes. Finally it can be used as a proxy for the market portfolio of risky asset that facilitate the calculation of market return and risk. Stock index can be a price weighted index, a value weighted index and an unweighted index or an equal-weighted index. Dhaka Stock Exchange has three indexes, namely, DSI, DGEN and DS20. All are market value weighted index and these are calculated according to the IOSCO (International Organization of Securities and Exchange Commission) method. Dhaka Stock Exchange calculates current index on real time basis as well as closing index for every trading day.

Stock index:
There are three indices in the DSE as follows:
|Sl. No |Index Name |Base Index | Latest Index (05.08.08) | |1 |DSI (all shares) |350 (as on 01-11-1993) |2332.90585 | |2 |DGEN |817.63704 (as on 24-11-2001) |2714.33358 | | |(A, B & G) | | | |3 |DS20 |1000 (as on 01-01-2001) |2482.85967 |

DSI:
✓ It is a value weighted index.
✓ It is calculated according to IOSCO method.
✓ Its base value is 350 (as on 01-11-1993).
✓ Latest index is 2332.90585 (dated 05.08.08).
✓ All types of shares are included in the calculation of DSI. Different types of share are followings- Group A: Companies which are regular in holding the current annual general meetings and have declared dividend at the rate of ten percent or more in the last English calendar year are in this ‘A’ group.

Group B: Companies which are regular in holding the annual general meetings but have failed declare dividend at least at the rate of ten percent in the last English calendar year is in this B category.

Group G: ‘G’ stands for Greenfield. Companies who have not started production before approaching into the market included in this G group.

Group Z: Companies which have failed to hold the current annual general meetings or have failed to declare any dividend or which are not in operation continuously for more than six months or whose accumulated loss after adjustment of revenue reserve, if any, is negative and exceeded its paid up capital are in this Z group

Group N: Recently another group is introduced which is called ‘N’ group. ‘N’ stands for New. The companies which are not included in the Greenfield category but new in the stock exchanges are included in the group N. DGEN:

✓ It is a value weighted index.
✓ It is calculated according to IOSCO method.
✓ Its base value is 817.63704 (as on 24-11-2001).
✓ Latest index is 2714.33358 (dated 05.08.08).
✓ A, B, G categories of shares are included in the calculation of DGEN which are discussed earlier. DS20:
✓ It is a value weighted index.
✓ It is calculated according to IOSCO method.
✓ Its base value is 1000 (as on 01-01-2001)
✓ Latest index is 2482.85967 (dated 05.08.08).
✓ DSE-20 index was introduced on January 01, 2001 with several blue chips. ✓ The index has been revised twice in 2002 and 2004.
✓ The Dhaka Stock...
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