Bombay Stock Exchange was established by Premchand Roych in 1875. Today, BSE Limited is synonymous with Dalal Street. There were no stockbrokers in Mumbai at that time. Four stock brokers met around a tree in Mumbai’s city center in the early 1850s. This is where Horniman Circle is now located.
History of Bombay stock Exchange (BSE)
The four men decided to form an organization that would trade the different currencies of different countries, thereby creating the first ever derivatives market in the world. Later, many derivative instruments were created such as the FOREX (foreign currency exchange), BSE (barter exchange), and CFD (counterfeit derivate). The Bombay stock market became the most popular trading platform for all types of derivatives. It is Asia’s second-largest financial market, after Tokyo Stock Exchange.
The next phase of development in this market saw formation of Mumbai as one of the biggest financial centers of the country. Since then, Mumbai has been a major financial center in India. There are many reasons behind this trend. Mumbai is home to the biggest film industry in Asia as well as the third largest economy of the country. Apart from being the biggest financial centre of the country, Mumbai also happens to be the birth place of many iconic companies, most prominently of which are Kolkata Stock Exchange and Citibank.
The story of Mumbai starts at the end of nineteenth century.
Bombay was the largest textile manufacturing city in India at that time. At that time, the most profitable textile items were silk and cotton, which were in great demand from different parts of India and abroad. The two main steam engines used at that time were the Lohia Engine and the Bala Engine. These two inventions led to the rapid development of large textile mills that required enormous amounts of capital and water.
The two most important companies of that time were the Bombay Telephone Company and the Bhau Daji Lad Corporation, which were involved in the construction of various textile mills and power-generating stations in Mumbai. The name of this famous metropolis in Mumbai was changed shortly after these two companies began investing in the Mumbai market. Because of the many spices and other gourds imported from all parts of India, it was called “dalal street”. Later, the name was changed to Baba Dada because the Bengalis started to refer to it as “Baba Dooj”, or Christmas.
Many considered the first year of the Bombay Stock Exchange’s (BSE), the golden age of Indian trading. This era saw many investors from all parts of India and the world. A lot of traders from the Middle East came to Mumbai to participate in the profits made in the trading of the Bombay stock exchange. This was a pivotal moment in the history Indian stock market history. Without Middle-East investors, India would have a near total financial disaster.
The Bombay Stock Exchange decided to change its opening hours from seven days to four days, so that the traders working in the city could have more holidays during the festive season. The electronic trading system was also introduced to reduce the risk of fraudulent trades that could result in a loss of investor’s money. The old system allowed traders to work on the trading platform throughout the day and then check their trades at night. The electronic trading system allows investors to instantly make a decision and all trades can be checked in real-time.
Although the Bombay Stock Exchange is well established now
, but it is still essential for investors to be well versed with the financial market news. There are several newspapers published on the Internet, which offer comprehensive news on the stock exchange. The investors are advised to read these newspapers regularly in order to stay updated with the latest market news. Investors should also keep an eye out for other newspapers in the area that might have important information. Investors will be able to find information in these newspapers about the different sectors in which they can invest.