BSE launches Sensex futures index, CPSE index

CPSE index will track returns generated by state-owned companies where direct holding of govt is 51% or more

Asia’s oldest stock exchange, the BSE, on Monday announced the launch of two new indices – the BSE S&P Sensex Futures Index and the BSE S&P CPSE Index. The BSE S&P Sensex Futures Index will track the returns generated by the 30-stock Sensex futures.

The CPSE Index will track returns generated by the state-owned companies, barring public sector banks. The CPSE Index will track returns generated by state-owned companies where the direct holding of the government is 51 per cent or more. The indices were developed by Asia Index Private Ltd, a joint venture between BSE and the S&P Dow Jones Indices. “The S&P BSE Sensex Futures Index, a first of its kind in the Indian market, will help investors track the returns generated from investment in the near-month (one month) futures contract on S&P BSE Sensex traded on BSE. The index includes a provision for the replacement of the index futures contract as it approaches maturity,” said a press release.

Market participants welcomed the innovation but believe that acceptability and subsequent rise in volumes might still be sometime away.

"The product innovation is a positive step but appetite among retail investors for such products is still at a nascent stage. Usage and acceptance of such a product could take a while," said Sahaj Agrawal, deputy vice president (derivatives research), Kotak Securities.