BANKEX
List of Bankex stocks
What Is The BSE Bankex Index?
The National Stock Exchange and the Bombay Stocks Exchange of India are two main pillars of the Indian stock market because they allow investors to trade and invest in over 4000+ listed companies quickly and efficiently. As the stock market grew and more companies got listed on the exchanges, developing suitable tools for tracking markets became the primary responsibility of the exchanges. Hence, over time, these institutions have created a portfolio of market indices that have assisted investors in navigating their investing journey and tracking the real-time health of the Indian markets.
The S&P BSE Bankex was one such index launched by the Bombay Stock Exchange on 23rd June 2003. It is a benchmark index that tracks the behaviour of the Indian banking sector. It includes the constituents of the BSE 500 index, categorised as banking stocks as per the BSE industry classification systems. The Bankex is a benchmark index that portrays the real-time image of the Indian banking sector’s performance by tracking the movement of the top 10 banking stocks listed on the Bombay Stock Exchange of India.
- There are over 4000+ stocks listed on the Indian stock exchanges.
- To help investors keep a tab on the stock market’s movement, BSE and NSE have developed a range of market indices such as the Nifty 50, Nifty 100, Sensex, etc.
- The S&P BSE Bankex is an important index that was launched on 23rd June 2003 by the Bombay Stock Exchange.
- Bankex is a sectoral index of BSE that gauges the overall health of the Indian banking sector by tracking the performance of the top 10 BSE-listed banking stocks.
- The constituents of the Bankex index comprise the top 10 banking stocks from the BSE 500 index.
How Is The S&P BSE Bankex Index Calculated?
The Bankex index is calculated using a modified or non-market capitalisation method. This method is different from the free float market capitalisation method that is used to calculate the index value of most market indices. In this method, the weight of each constituent of the Bankex index is capped at 22%. Using the modified market capitalisation method, the Bankex index is able to reflect the aggregate modified cap of the top 10 banking stocks and allows the investors to analyse the sentiment of the baking sector.
The formula for the Index value is
Index value = ΣPi * Sharesi * IWFi * FxRate
Here,
Pi = Price of constituting stocks
Share si = Number of stocks
IWFi = Stock’s float factor
FxRate = Foreign Exchange rate
- The Bankex index is constituted using the modified market capitalisation method.
- The weight of the index’s constituents is capped at 22% for each stock.
- The index is reconstituted semi-annually in June and December every year, and it has a base value date of 1st January 2002 and a base value of 1000.
Eligibility For Becoming A Part Of The Bankex Index
- Stocks must be listed on the Bombay Stock Exchange and must be classified as members of the banking sector as defined by the BSE industry classification system.
- Stock must form part of the BSE 500 index.
- Only the top 10 banking sector companies, as per market capitalisation calculated over the last 3 months, are eligible.
- The stock must have been traded regularly in the past 3 months.
- Stock must have a listing history of at least 3 months.
- Stocks must have a trading frequency of at least 90% in the prior 6 months.
Historical Returns Of The S&P BSE Bankex Index
Per the official data of 29th November 2024, the Bankex index has provided impressive returns in previous years. The 5-year total annualised return for Bankex stood at 11.00%, whereas the 3-year and 1-year returns stood at 14.23% and 18.89%.
The above figure depicts that the banking sector has shown tremendous growth in the long term, and it is poised for further growth. Thus, investors can invest in the banking sector for the long term to gain substantial returns.
- The Bankex index has provided around 11.00% total annualised returns over the past 5 years.
- The 3-year and 1-year total annualised returns provided by Bankex stood at 14.23% and 18.89%, respectively.
FAQs
What is the Bombay Stock Exchange?
The Bombay Stock Exchange of India is the leading and oldest stock exchange in Asia. It was established by a cotton merchant, Premchand Roychand, in 1875. BSE works as a marketplace that facilitates trading and investing activity among investors. It allows the Indian masses to trade in various financial instruments and markets through screen-based trading software. It also offers regulatory and clearance services to investors. Along with these facilities, BSE is also responsible for launching the Sensex index through its wholly owned subsidiary, Asia India Index Private Limited. Sensex is the flagship index of BSE that tracks the performance of the top 30 BSE-listed companies.
Why should I track the S&P BSE Bankex Index?
You should track the S&P BSE Bankex Index because it offers you a comprehensive overview of the health of India's banking sector by evaluating the performance of the top 10 banking stocks from the BSE 500 index. Through the analysis of the index’s movements, you can understand the general market sentiment of the Indian banking industry and make a wise investment.
What is the sectoral representation of the Bankex index?
Since Bankex is a sectoral index, it focuses entirely on representing the financial services industry. This industry holds a 100% sector representation in the index and is distributed over 10 constituents of the index.
Which are the top 5 constituents of the index?
The top 5 constituents of the Bankex index are:
- HDFC Bank Ltd.
- ICICI Bank Ltd.
- State Bank of India
- Axis Bank Ltd.
- Kotak Mahindra Bank Ltd.
Can I trade BSE Bankex?
Yes, you can trade the BSE Bankex index through its future and option contracts. However, derivative markets are very volatile, increasing the risk percentage. Therefore, you must analyse your risk tolerance and capital availability before trading derivative contracts of the Bankex index.
What is the Asia Index Private Limited?
The Asia Index Private Limited (AIPL) is a wholly owned subsidiary of the Bombay Stock Exchange (BSE). It was constituted after a 50-50 partnership between S&P Dow Jones Indices LLC, and BSE Ltd. AIPL is responsible for calculating, managing, and publishing a wide range of stock market indices for BSE, which allows both international and domestic investors to track the performance of the Indian economy and the stock market.
Can I invest in Bankex for the long term?
Yes, you can invest in the Bankex index for the long term by investing in index funds and Exchange Traded Funds (ETFs). These investment vehicles are specially curated to replicate the performance of the market indices and other financial instruments. You can choose to invest in index funds or ETFs which follow the behaviour of the Bankex index through SIP or lump sum method. By doing so, you will be able to generate returns similar to that of the Bankex index with limited capital and risk. Additionally, you can trade ETFs on the stock market just like equities.
In addition to index funds and Exchange Traded Funds (ETFs), you can invest in the Bankex index through direct stock purchases. Under this method, you can invest in each of the Bankex constituents separately in the same manner as they are present in the index. However, this method is suitable for highly sophisticated investors who have the required skill set and capital to replicate the index performance manually.
How is Bankex different from Nifty Bank?
The S&P BSE Bankex index and Nifty bank are different because the former is under the Bombay Stock Exchange (BSE) purview, and the latter is the index of the National Stock Exchange (NSE). Additionally, the Bankex index includes the top 10 stocks from the BSE 500 index, whereas Nifty Bank tracks the top 12 NSE-listed banking stocks.
Can I track the Bankex index on the Univest app?
Yes, you can track the Bankex index on the Univest app. You first have to download and register on the Univest app. Once you have completed the process, you have to locate the market section on the app's home screen, and you will find various index charts on the resultant interface, including the Bankex chart.