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- SX40 is the first and only index in India to adopt FTSE’s Group’ Industry Classification Benchmark (ICB) and is backed by sound research of Indian Statistical Institute (ISI) and FTKMC
- SX40 uses ICB’s capping methodology to eliminate industry bias, which has led to higher returns for investors compared to other indices
- Investor participation in SX40 derivatives is on a steady rise with volumes touching Rs 1500 crore in just two months
SX40, the 40-stock flagship index of MCX Stock Exchange (MCX-SX), was conferred with the prestigious ‘Golden Peacock Eco-Innovation Award’ for the year 2013 for use of completely scientific and rule-based methods, along with incorporation of global best practices in index creation and computation.
Launched by Hon’ble Union Finance Minister Shri. P Chidambaram on February 9, 2013, SX40 is a free float-based index of 40 large cap and liquid stocks. It is the first and only index in India based on Industry Classification Benchmark (ICB), the global company classification standard of the FTSE Group, London and is backed by sound research of India’s premier statistical and research institutes such as Indian Statistical Institute (ISI) and FTKMC. SX40 uses ICB’s capping methodology to eliminate industry bias, which has led to higher returns for investors compared to other indices.
Since SX40 is scientifically constructed and is a completely rule-based index, it is more reliable for any category of participants due to the transparency it provides and avoidance of human intervention and subjective judgment while selection of stocks in the index. Industry capping results in elimination of industry bias, better portfolio diversification and enhanced Index stability.
These factors have contributed significantly to the steady increase in investor interest and participation in SX40 derivatives. Volumes on SX40 futures and options (launched in May) crossed Rs 1000 crore mark within just 45 days on June 28th and by July 17th, volumes reached Rs 1500 crore. Average Daily volumes in SX40 derivatives have doubled to about Rs 1000 crore in July from Rs 500 crore in June.
The Award was presented by Hon'ble Dr. M Veerappa Moily, Union Cabinet Minister for Petroleum and Natural Gas, Government of India, at the 15th World Congress on Environment Management & 24th IOD Annual Day and Golden Peacock Awards presentation in New Delhi.
Mr. Joseph Massey, MD&CEO, MCX-SX said, “SX40 winning the prestigious Golden Peacock Award is a matter of great pride and honour for us all of us at MCX-SX. This award firmly establishes the superiority of the index in terms of design, transparency and reliability. SX40 introduces global best practices in index creation in India.”
Bestowed annually, Golden Peacock Awards were instituted by the Institute of Directors (IOD) in 1991 and today is regarded as the benchmark of corporate excellence worldwide.
SX40 was declared the winner of this year’s ‘Golden Peacock Eco Innovation Award’ after an exhaustive selection process and scrutiny of applications by the Awards Jury under the Chairmanship of Justice P N Bhagwati, former Chief Justice of India and Member, UN Human Rights Commission.
