BSE (Bombay Stock Exchange) and NASDAQ (National Association of Securities Dealers Automated Quotations) are two of the most well-known stock exchanges in the world. Both have their own unique characteristics, history, and features that make them distinct from one another.
Overview of Bombay Stock Exchange and NASDAQ
1. Bombay Stock Exchange (BSE) – India
BSE is the oldest stock exchange in Asia and the first in India. It was established in 1875 and is located in Mumbai. It is the fastest stock exchange in the world by the number of trades executed per day. BSE has more than 5,500 listed companies, making it one of the world’s largest stock exchanges by the number of listed companies. It has a market capitalization of around $3 trillion as of March 2023.
2. NASDAQ – United States of America
NASDAQ, on the other hand, is an American stock exchange that was established in 1971. It is the second-largest stock exchange in the world by market capitalization, behind the New York Stock Exchange (NYSE). It is known for its electronic trading platform and is home to many high-technology companies such as Apple, Microsoft, and Amazon. NASDAQ has a market capitalization of around $19 trillion as of March 2023.
Trading Process of BSE and NASDAQ
The trading process for both exchanges is quite similar that uses an electronic trading platform that enables traders to place orders through a computer network. BSE also uses the open outcry system and was the main method of trading before the it is shifted to electronic mediums. Although the open outcry system is not widely used today, the trading floor is still used by some traders.
Difference between BSE and NASDAQ
a. Type of Companies listed on the exchanges: One of key difference between the two exchanges is the type of companies that are listed on them. BSE is known for its large number of small and medium-sized companies, while NASDAQ is known for its large number of technology and internet-based companies.
b. Indices of exchanges: BSE has a wide range of indices such as S&P BSE SENSEX, S&P BSE SmallCap, S&P BSE MidCap, S&P BSE 100, S&P BSE 200, etc. These indices are used as a benchmark to measure the performance of the stock market and are widely followed by investors. NASDAQ, on the other hand, has the NASDAQ Composite index which is a market capitalization-weighted index of all the common stocks listed on the NASDAQ stock market.
c. Regulatory Authority: In terms of regulations, BSE follows the rules and regulations set by the Securities and Exchange Board of India (SEBI), the regulatory body for the securities market in India. NASDAQ, on the other hand, is regulated by the Securities and Exchange Commission (SEC), the regulatory body for the securities market in the United States.
Conclusion
BSE and NASDAQ are two of the most well-known stock exchanges in the world, each with its own unique characteristics, history, and features. BSE is the oldest stock exchange in Asia and the first in India, known for its large number of small and medium-sized companies. NASDAQ, on the other hand, is an American stock exchange known for its electronic trading platform and its large number of technology and internet-based companies. Both exchanges have different regulations, indices and trading process. While BSE is regulated by SEBI, NASDAQ is regulated by the SEC.
