x Abu Dhabi, UAEMonday 24 July 2017

BSE's transition from Banyan shade to mighty site in India

India Dispatch: The towering building that is the Bombay Stock Exchange – Asia's oldest bourse – has its roots in brokers gathering under the nearby banyan trees in the 1850s.

The Bombay Stock Exchange building. Subhash Sharma for The National
The Bombay Stock Exchange building. Subhash Sharma for The National

Asia's oldest bourse set up after brokers gathered in streets

The BSE, formerly known as the Bombay Stock Exchange, was established in 1875 and is Asia's oldest stock exchange.

The towering building that houses the exchange, situated on Dalal Street, is a landmark in India's bustling financial capital, Mumbai. But the history of broker meetings in Bombay, as Mumbai was then called, can be traced back much earlier. In the 1850s, a few brokers would gather under banyan trees, not far from where the exchange is now located.

"As the number of brokers increased, they had to shift from place to place, but they always overflowed to the streets," according to the BSE. In 1874, the brokers found a permanent place, and one that they could call their own - aptly called Dalal Street, which translates from Hindi, as Brokers' Street.

The exchange was formally founded the following year and is now the largest in the world in terms of the number of listed companies, with more than 5,000 firms, according to the World Federation of Exchanges. BSE, which has a market capitalisation of more than US$1 trillion, has played a major role in corporate growth in India.

"The journey of BSE is as eventful and interesting as the history of India's securities market," the exchange says. "In fact, as India's biggest bourse in terms of listed companies and market capitalisation, almost every leading corporate in India has sourced BSE services in raising capital and is listed with BSE."

The S&P BSE Sensex launched in 1986 as the first equity index in India. It is now considered to be India's benchmark equity index, reflecting the health of the country's economy.

The introduction of the BSE online trading system in 1995 resulted in electronic trading replacing the traditional open system of simply crying out.

In March 1993, a bomb ripped through the BSE, claiming more than 80 lives. It was the first in a series of blasts across the city on the same day. Stringent security procedures are now in place.