Commodities exchange NCDEX, formerly known as National Commodities and Derivatives Exchange, has announced the launch of its first equity offerings: two rule-based indices – NDEX and FINNDEX.
NDEX is a benchmark index comprising 20 large and liquid Indian equities that are selected from a universe of the top 60. FINNDEX comprises 15 financial sector stocks, excluding insurers.
The indices are based on a multi-factor approach towards selection of stocks and assigning of weights. The indices use a composite score comprising free-float market capitalisation (30%), average daily traded value (30%), beta (20%) and volatility (20%), as per the press release.
The exchange's newly appointed CEO Vikas Goel said that the offerings solve the problem of the current headline indices - NSE’s Nifty 50 and BSE’s Sensex-focused on free-float market-capitalisation.
We already have the Nifty and Sensex. What is the gap in the market that NDEX and FINNDEX will fill?