Days Range
Company | LTP | Change | Day Range |
|---|
Sector Name | Advances | No Change | Declined |
|---|
Similar to indexes like SENSEX and BSE 100, BSE has classified the companies listed on the stock exchange on various bases to keep a better track of companies and their performance. S&P BSE Consumer Discretionary Goods and Services index is a part of the thematic indices of BSE, which tracks the performance of those companies that are involved in production and manufacturing.
It forms part of the Bombay Stock Exchange, which is Asia’s oldest stock exchange having more than 6000 listed companies and was established in 1875. The BSE CDGS index tracks the performance of those companies that deal in consumer discretionary goods and services. The constituent companies are classified as BSE as the consumer discretionary goods and services sector. It provides the investors with a benchmark that reflects and tracks the performance of such companies.
Consumer discretionary goods and services refer to those goods that are considered to be luxury or non-essential by people. The purchase of such goods and services is dependent on the disposable income of an individual. For example, a person with a low income will consider an Air conditioner as a non-essential good. Similarly, someone with a higher income will consider the same as an essential good. But, BSE has classified the companies that deal in consumer discretionary goods like automobiles, textile, leisure equipment and durable goods.
S&P BSE Consumer Discretionary Goods and Services index reflects the movement and performance of companies that deal in consumer discretionary goods and services. The companies included in the CDGS category are classified as per BSE’s classification system. The index was launched on 15th April, 2015 for the first time. BSE AllCap index is where the constituents of the index are selected from. The value of the index is affected by BSE CDGS share prices.
The index uses real-time values using the float-adjusted market capitalisation method. Earlier, a full capitalisation method was used to calculate the index value. But, in 2003, the method was changed to float-adjusted market capitalisation. Unlike full capitalisation, the float-adjusted market capitalisation method does not consider the privately held shares while calculating the index value. In other words, only those shares are considered that are available for trading on the stock exchange.
The index consists of 256 companies. BSE rebalances this index every year in September and reviews the stocks on a quarterly basis. The reviews are conducted in March, June and December every quarter. While it was launched in 2015, 16th September, 2005 is considered as the base date for BSE CDGS stock price.
Earlier, the method of calculating the index values was the full capitalisation method. All the shares, whether privately held or exchange-traded, were considered while calculating the market cap. Later it was realised that the privately held shares do not have any impact on the market price of the stock, and including it in the calculation was disrupting the true picture of the index performance. Float adjusted capitalisation method was introduced in 2003 to solve this problem.
Float adjusted market capitalisation method uses only the freely tradable shares while calculating the index value. It is so because the privately held shares do not have any significant impact on the BSE CDGS share price and can mislead the investors about the performance of the index. Let us understand this with the help of an example -
Company B has 1 lakh shares listed on the stock exchange. Only 60% can be traded on the exchange by the shareholders. The current market price of the stock is INR 500. Here’s how we will calculate the free-float market cap -
| Total Shares in Market for Company B | A | 1 lakhs |
| Market Price per share of Company B | B | INR 500 |
| Total Market capitalisation | C = A*B | INR 5 Crores |
| Free-float factor (60%) | D | 0.6 |
| Free-Float Market capitalisation | E = C*D | INR 3 Crores |
Now the float-adjusted market cap of all constituent stocks is added to find the total free-float market cap.
Here’s the formula for calculating the index value -
| BSE CDGS Index = Total Free-Float Market capitalisation x 100
Base Market capitalisation |
