MBSL Midcap Index year 2019 marks 19 years

In a pioneering move, Merchant Bank of Sri Lanka & Finance PLC (MBSL) constructed a Stock Market Index: the ‘MBSL MIDCAP Index’, which measures the aggregate price level and price movements of medium size companies listed on the Colombo Stock Exchange (CSE). The index which came into operation in the Year 1999 is revised annually and looks at the Middle Range Market Capitalisation, Liquidity and the Profitability of the firms to be included in the MBSL MIDCAP Index. 

Benefits of the MBSL MIDCAP Index

MBSL MIDCAP Index can be used as the benchmark index by individuals and institutional investors who prefer growth but are prepared to with stand only conservative levels of volatility in their equity investments.

It can be used as the benchmark index for the introduction of MBSL MIDCAP linked index funds.

MBSL MIDCAP Index generate valuable signals for portfolio managers for switching from larger-cap more sensitive stocks to midcap less sensitive stocks with more growth potential in response to changing capital market conditions. The MBSL MIDCAP Index focus in profitability, helps to screen stocks with better future prospects that will cross to higher market capitalisation in the coming year.

MBSL MIDCAP Index which is in effect from 1 January 2019 and the criteria for selecting the twenty-five stocks of the index remained unchanged. They are;

A.Middle Range Market Capitalisation as at 30 November 2018.

B.Liquidity based on number of trades during the year.

C.Profitability within the last two years.

When calculating the midcap index for the previous year (2018), stocks were selected from the market capitalisation range of Rs. 2.38 billion to 23.85 billion and with the changes of ASPI the midcap range is defined for the year 2019 as Rs. 2.24 billion to Rs. 22.39 billion.