A rival for the fabled Sensex is on the anvil. Rupert Murdoch-owned Dow Jones Indexes – which owns the widely tracked Dow Jones Industrial Average index that covers 30 large US companies listed on the New York Stock Exchange — has unveiled a blue chip index for India. The Dow Jones India Titans 30 Index will measure the performance of the 30 largest and most liquid stocks listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
Dow also announced the launch of The Global Dow, an index whose components are selected by the editors of The Wall Street Journal. The indexes were unveiled by Rupert Murdoch, chairman and chief executive of News Corporation in Mumbai on Monday.
“I’m excited to announce the launch of a new blue-chip index for India. It will be licensed to financial institutions as the basis of investment products, such as exchange-traded funds,” Murdoch said. “It’s to be seen how the Dow’s India index is going to be accepted. The Sensex is synonymous with the stock markets. Even the NSE’s Nifty Index could not challenge the position of the Sensex,” said BSE dealer Pawan Dharnidharka. The Sensex (short for BSE Sensitive Index), which tracks the movement of 30 major stocks listed on the BSE, is the most widely tracked marker in India now.
The Titans Index is weighted with individual components capped at 10 per cent. The index is calculated in US dollar and Indian rupee and reviewed annually in March. As of July 31, 2008, the Dow Jones India Titans 30 (US $) has gained 62.03 per cent back tested from its base date, December 31, 2005.
“What the world needs is a trusted means of measuring this country’s development and an index that can be used by investors around the world to track the progress of Indian companies and the Indian economy. We will see huge capital flows both from and to India in coming years and that is an opportunity for us as a financial information company, as well as for international investors who want to take advantage of this profound trend,” Murdoch said.
Murdoch said: “The world is changing and how we measure that change economically and financially is clearly a challenge and an opportunity. We have seen a reweighting of risk, but the world itself is being economically rerated and so we need an index that allows investors to take advantage of these changes.” According to Murdoch, Indian companies will obviously have a place in The Global Dow “as will companies from other emerging countries where we have seen an unprecedented economic emancipation over the past two decades”.
Robert Thomson, managing editor, The Wall Street Journal said, “While we must reflect the global stock market as it is, we must also recognise the rapid rise of companies in countries such as India.” The Global Dow will track the share prices of existing and future global leaders in every industry.
News courtesy: Indian Express