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    Avatar May 29, 2015: Inanew Starting From

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    The document provides information about changes being made to the CNX IT index, which tracks the Indian IT sector. Key changes include reducing the number of constituent stocks from 20 to 10, and capping the maximum weight of a single stock at 25% to reduce the impact of any single stock. The top two stocks will also be capped at a combined weight of 50%. The changes aim to make the index easier to replicate and more representative of the overall sector performance. Details are provided about the index methodology, constituent stocks, and specifications of the derivatives products available on the index.

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    Avatar May 29, 2015: Inanew Starting From

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    sankarjv
    38 views11 pages
    The document provides information about changes being made to the CNX IT index, which tracks the Indian IT sector. Key changes include reducing the number of constituent stocks from 20 to 10, and capping the maximum weight of a single stock at 25% to reduce the impact of any single stock. The top two stocks will also be capped at a combined weight of 50%. The changes aim to make the index easier to replicate and more representative of the overall sector performance. Details are provided about the index methodology, constituent stocks, and specifications of the derivatives products available on the index.

    Original Description:

    cnxit

    Original Title

    CNXIT_260515

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    The document provides information about changes being made to the CNX IT index, which tracks the Indian IT sector. Key changes include reducing the number of constituent stocks from 20 to 10, and capping the maximum weight of a single stock at 25% to reduce the impact of any single stock. The top two stocks will also be capped at a combined weight of 50%. The changes aim to make the index easier to replicate and more representative of the overall sector performance. Details are provided about the index methodology, constituent stocks, and specifications of the derivatives products available on the index.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    38 views11 pages

    Avatar May 29, 2015: Inanew Starting From

    Uploaded by

    sankarjv
    The document provides information about changes being made to the CNX IT index, which tracks the Indian IT sector. Key changes include reducing the number of constituent stocks from 20 to 10, and capping the maximum weight of a single stock at 25% to reduce the impact of any single stock. The top two stocks will also be capped at a combined weight of 50%. The changes aim to make the index easier to replicate and more representative of the overall sector performance. Details are provided about the index methodology, constituent stocks, and specifications of the derivatives products available on the index.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 11

    in a new avatar starting from

    May 29, 2015


    Presentation outline

    • About the CNX IT index

    • Key changes to the index

    • Derivatives product specifications

    • Product usage

    2
    About the Index – CNX IT

    • Benchmark for capturing the performance of Indian IT Sector

    • Computed using Free float market capitalization method

    • 20 stock constituents (till May 28, 2015)

    • Base Date : January 01,1996

    • Base Value: 100

    • Represents
    – 11.27% of free float Mcap of stocks listed on NSE
    – 97.25% of free float Mcap of stocks forming part of IT sector

    • Returns in last 1 year 29.95% and Standard deviation@ 18.63%

    Market Cap and returns data as on Mar31, 2015

    3
    Eligibility criteria for selection of constituents

    • Companies with more than 50% of their turnover from IT related activities
    • Stock must rank within the top 500 companies by average free-float
    market capitalisation and aggregate turnover for the last six months
    • Company should form a part of the IT sector
    • The stock's trading frequency should be at least 90% in the last six months
    • The company should have reported a positive net worth
    • The company should have an IWF of at least 10%
    • Final selection of 10 companies shall be done based on the free-float
    market capitalization

    4
    Key changes to the Index

    Starting from May 29, 2015 CNX IT index undergoes the following changes
    • Reduction in the number of constituent stocks from 20 to 10
    − Expected to bring ease in replicating the index
    • Capping on maximum weightage of a single stock @ 25%
    • For true reflection of sector performance as a whole through minimizing impact
    of any single stock

    • CNX IT index in a new avatar


    New avatar w.e.f
    Particulars Existing scenario
    May 29, 2015 #
    No. of constituent stocks 20 10
    Weight of top 1 stock 42% 25%
    Weight of top 2 stocks 66% 50%
    % of no. of stocks available in derivatives 50% 80%
    % of stocks weights available in derivatives 94.90% 97.10%

    # tentative weights

    5
    Introduction to the all new CNX IT Index

    • Benchmark for Indian IT Sector – Sr. No Stock Name Symbol


    represents 93% of Mcap of IT sector 1 Infosys Ltd. INFY
    11% of the total Mcap 2 Tata Consultancy Services Ltd. TCS

    • 10 stocks index – easy to replicate and 3 HCL Technologies Ltd. HCLTECH

    trade 4 Tech Mahindra Ltd. TECHM


    5 Wipro Ltd. WIPRO
    • Maximum weightage of stocks capped at
    Oracle Financial Services
    25% 6
    Software Ltd.
    OFSS

    • 5 CNXIT stocks are part of Nifty (15.4%) 7 MindTree Ltd. MINDTREE


    8 Info Edge (India) Ltd. NAUKRI
    • Actively traded underlying stocks in cash
    9 Cyient Ltd. CYIENT
    and stock derivative segments.
    10 Justdial Ltd. JUSTDIAL

    # approximate weights

    6
    Stocks moving out of CNX IT

    Sr. No Stock Name Symbol


    1 Hexaware Technologies Ltd. HEXAWARE
    2 Firstsource Solutions Ltd. FSL
    3 KPIT Technologies Ltd. KPIT
    4 MphasiS Ltd. MPHASIS
    5 NIIT Technologies Ltd. NIITTECH

    6 Persistent Systems Ltd. PERSISTENT

    7 Polaris Consulting & Services Ltd. POLARIS


    8 Rolta India Ltd. ROLTA
    9 Tata Elxsi Ltd. TATAELXSI
    10 eClerx Services Ltd. ECLERX

    7
    CNX IT Derivatives - Product specifications

    Underlying Index CNX IT


    Security descriptor Futures: FUTIDX CNXIT
    Options: OPTIDX CNXIT
    Contract Size Permitted lot size shall be 25 and multiples thereof
    Min Price fluctuation / Tick zise Re.0.05
    Trading Cycle Maximum of three months trading cycle (NM – MM - FM)
    Expiration date and time / Last Last Thursday of the expiry month or the previous trading
    trading day & time day if the last Thursday is a trading holiday
    Settlement Cash settled in INR
    Daily Interim MTM settlement Based on daily closing price of the contract
    Final settlement Based on closing price of underlying
    Strike Scheme* 16 ITM – 1 ATM – 16 OTM with an interval of 100
    Quantity Freeze 7500
    Market timings 09.15 – 3.30

    *Based on the current index level as onMay18, 2015

    8
    Usage of Derivatives on CNX IT index

    • Portfolio diversification
    • Hedge underlying portfolio
    • Express directional views on the performance of IT sector
    • Various option trading strategies

    9
    CNX IT Index Movement

    10 Private & Confidential


    To know more about the CNX IT index derivatives, visit:
    http://www.nseindia.com/products/content/derivatives/equities/cnxit_fando.htm
    Disclaimer : The information contained in this document, including text, graphics, links or other information are provided on an 'as is', 'as available' basis. Nothing
    herein constitutes an offer to sell or a solicitation of an offer to purchase any product listed on NSEIL. NSEIL does not warrant the accuracy, adequacy or
    completeness of this information and material and expressly disclaims liability for any errors or omissions in this information and material and its interpretation. No
    warranty of any kind, implied, express or statutory, including but not limited to the warranties of merchantability, fitness for a particular purpose is given in
    conjunction with the information and materials. The content, accuracy, opinions expressed, and other links provided by these resources are not investigated,
    verified, monitored, or endorsed by NSEIL. The views contained herein are not to be taken as an advice or recommendation to buy or sell any investment or
    interest thereto. Reliance upon information in this material is at the sole discretion of the reader. The views and strategies described may not be suitable for all
    investors. Both past performance and yield may not be a reliable guide to future performance. All case studies are shown for illustrative purposes only and should
    not be relied upon as advice or interpreted as a recommendation. Results shown are not meant to be representative of actual investment results. Furthermore,
    whilst it is the intention to achieve the investment objective of the investment product(s), there can be no assurance that those objectives will be met. Investors
    are advised to consult their I investment and Tax Advisor before taking any investment decision. In no event will NSEIL be liable for any damages, including
    without limitation direct or indirect, special, incidental, or consequential damages, losses or expenses arising in connection with this document or its use or
    inability to use by any party, or in connection with any failure of performance, error, omission, interruption, defect, even if NSEIL, or its representatives, are
    advised of the possibility of such damages, losses or expenses.

    Private & Confidential

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