– SXBANK, designed to measure the performance of the Indianbanking sector, comprises of 10 most liquid and large capitalized banking stocks,as classified by ICB® –the leading global Industry Classification System from FTSE
– This is the first sectoral index, developed for the Indian banking sector,that has a cap on the weight of the individual stocks, thereby making the index more evenly distributed without skewness
– A first in sectoral indices series from the Exchange; MCX-SX, had earlier unveiled its flagship index, ‘SX40’, a free float-based index of 40 large cap & liquid stocks representing diverse sectors of the economy
– MCX-SX is the first and only exchange in India to have adopted FTSE’s Industry Classification Benchmark (ICB) to design the indices. The ICB is adopted by the world’s leading exchanges, including NASDAQ, LSE and Singapore Stock Exchange
April 09, 2014: MCX Stock Exchange (MCX-SX) today announced the launch of its new index ‘SXBANK’, to provide a benchmark to capture the performance of the banking sector of the Indian economy. SXBANK consists of 10 most liquid and large capitalized stocks from the banking sector. The Index, which is based on ICB® – the leading global Industry Classification System from FTSE,is computed using capped free float market capitalization method. SXBANK is scientific, transparent and a completely rule-based index, offering better reflection of the banking sector in the Indian economy with superior risk adjusted returns.
SXBANK constituents represent more than 80 per cent of the total market capitalisation of all bank stocks. The index is computedwith base date as 31March 2010,indexed to base value of 5000. Weight of individual stocks in the index has been capped at 15% to minimizeconcentration and thereby providing a cost-effective support for portfolio management and structured products such as index futures and options, index portfolio, exchange traded funds, and index funds.
MCX-SX Index Advisory Committee (IAC), comprising of academicians, industry experts, and fund managers periodically evaluates and examines the index rules to ensure its scientific nature and transparency on a continuous basis.
Commenting on the launch of SXBANK, Mr. Thomas Mathew T., Chairman-MCX-SX, said, “With the banking sector poised for further growth with structural reforms, new entrants and technology advancements, the banking stocks will further get into the limelight.The Exchange is committed to develop products that meet the requirements of the market participants.”
Mr.Saurabh Sarkar, MD&CEO, MCX-SX said, “SXBANK is uniquely positioned as it caps the weight of the individual stocks at 15%, the first for an index representing the banking sector in India. The index provides superior returns and risk adjusted returns, as compared to other banking indices over a 4 year period.We are pleased that it represents global best practices used for index creation in India.”
The newly appointed MCX-SX Board has been announcing various significant measures to develop various market segments, generate healthy volumes and attract larger participation on the Exchange. The new Board was formed as part of SEBI’s efforts to ring-fence MCX-SX. Mr. Thomas Mathew T., who retired as Current-in-Charge Chairman of Life Insurance Corporation of India is the Chairman and Prof. (Mrs.) AshimaGoyal, Professor at the Indira Gandhi Institute of Development Research is the Vice-Chairperson of MCX-SX.
The index will be launched with effect from April 10, 2014 and will initially be calculated on an end-of-day basis. The closing values of this index would be available on www.mcx-sx.com