NSE to launch CNX Smallcap Index tomorrow

The country's leading bourse National Stock Exchange (NSE) will launch a new index series CNX Smallcap Index tomorrow.

The move is aimed at developing an index that would meet the requirements of market participants.

The index is designed to reflect the behaviour and performance of the small capitalised segment of the financial market, according to a statement by India Index Services & Products (IISL), a joint venture of NSE and Crisil.

The NSE will launch CNX SmallCap Index with effect from March 30, 2011, it said.

The index is calculated using free float market capitalisation methodology, the total cost of buying all the shares in the open market, with a base date of January 1, 2004 indexed to a base value of 1,000, it added.

The company, which would be inducted in the index must have a three years' track record of operations with positive net worth.

Besides, the firms must have demonstrated a trading frequency of at least 90 per cent in the last six months and all constituents of the CNX Smallcap Index must have a minimum listing record of six months, it said.

The Bombay Stock Exchange had introduced a similar index called 'BSE Small-Cap' index in 2005.