Indices Gear Up For Marketing War

The National Stock Exchange (NSE) is set to launch an all-out campaign to dislodge its arch rival, the Bombay Stock Exchange (BSE) from its position as the most popular barometer for the Indian capital markets.

India Index Services and Products Ltd (IISL), the first specialised company of its kind, and Standard & Poors are planning an aggressive marketing campaign. A team will interact with fund managers across the country to market the new CNX indices before the start of derivatives trading in the country.

This is part of the exercise to make the S & P CNX Nifty the most popular, reliable and sophisticated product of its type on the Indian markets. The NSE hopes to make the key CNX indices popular with fund managers who are set to launch `index-tracker funds' when the stock markets show signs of an upswing.

 

IISL's index committee has already started fine-tuning the S & P CNX Nifty, with a detailed review every quarter.

``To date, marketing of an index was never looked into. The entire ball game changes when there is people's money riding on the index. Then factors like designing and balanced composition of the index, volatility, transparency and management of an index come into view both for fund managers and the average retail investor,'' says NSE deputy managing director Ravi Narain .

"It will be a high profile pure marketing exercise... just as much as a Coke-Pepsi battle,'' he said.

The campaign will focus on making the average retail investor _ who has a collective memory for the sensex _ associate important events with specific index levels and providing details of the sophisticated exercise in management of an index to fund managers.

The strategy of the NSE would be to highlight those factors which have made it the premier exchange.

``Factors like the S& P brand name, transparency, due-diligence, professional working of a separate and disciplined corporate entity, better returns on the index and lowest tracking error will be brought out by the team,'' said Narain.

The NSE will also consider the appointment of a specialised consultant from within the advertising/marketing industry who would aid in the marketing campaign.

Narain admits that erasing the historical and sentimental attachment with the BSE sensex will not be easy.

``It cannot be done tomorrow. But our study shows that the Nifty in recent years has only gained in popularity,'' he added.

The BSE on its part, will shortly frame out its marketing strategy for the sensex, as derivatives trading begins in India.