BSE Metal

About S&P BSE Metal Index

The S&P BSE Metal Index represents major companies involved in the mining and extraction of both heavy and precious metals. These metals are also quite indispensable as raw materials for every industry, thereby affecting the production of almost everything that is used in one's life. The index has constituents selected from the BSE 500 who belong to the metals sector classification provided by the BSE. Launched on August 23, 2004, with the base year 1999, this index reflects the performance of companies in the metals, metal products, and mining sectors.

Presently, the index has 10 companies; the aggregate average market capitalization is INR 642,696.8 million. It is calculated on a real-time basis and hence it gets affected by even a single movement in the price of its member stocks. This index followed initially a full capitalization weighted methodology, but from 2003 onwards, it started to follow a float-adjusted market capitalization methodology which considers only those shares that are available for trading. The Index is reviewed twice a year, in June and December, to ensure the Index is accurately representative of the sector. 

Criteria to Select Stocks for BSE Metal Index

For inclusion in the Metal index BSE, stocks would have to meet the following criteria: 

• Constituent stock in the BSE 500 Index: For the selection of the BSE Metal index companies, only those stocks must be selected that happen to be the constituents of the BSE 500 index. This makes sure that companies are well-established in the market and have substantial market participation.
• Float-adjusted Market Capitalisation: For each stock, float-adjusted market capitalization is considered over three months. In the ranking, it is averaged to consider only substantially large and steadily capitalized stocks.
• Trading Frequency: A stock has to have been traded at least 90% of the trading days in the past 3months for it to be included in the index. This will ensure that the selected stocks are actively traded and sufficiently liquid.

The criteria above are only to ensure that the right representation of performance is delivered through the BSE Metals index, comprising only those key companies that show significant market activity and stability. 

Calculation of BSE Metal index

The float-adjusted market capitalization is determined by first multiplying the total number of shares by the current market price per share. This figure is then adjusted by multiplying it with the free float factor to arrive at the float-adjusted market capitalization for BSE Metals.

The formula for calculating BSE Metal Share Price will be: 

BSE Metal Share Price Today = (Total Free-Float Market Capitalization × 100) / Base Market Capitalisation (1999).