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| Sunday, 22 June 2003 |
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| News Business Features Editorial
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MBSL Midcap crosses 2000 points The MBSL Midcap-Index, which measures the price movements of the medium sized companies in the Colombo Stock Exchange, crossed 2000 points last week, for the first time since it was launched in 1999. In the history of the Sri Lankan stock market, it was only in February 1994 that the Sensitive Price Index moved over 2000 points. Both the MBSL Midcap Index and the Milanka Price Index (MPI) commenced with the base set at 1000 points. The MBSL Midcap was the first to cross 1000 points in September 1999 while the MPI reached 1000 points in December 2001. The Midcap was the first to double its base value last week. Both the All Share Price Index and MPI are highly sensitive to price movements of a few large companies as these indices use market capitalisation as the weighting. The Midcap Index focused on the proper measurement of the price movement of medium-size companies, providing a framework for possible use in midcap index fund. The index consists of 25 stocks based on market capitalisation (in the range of Rs. 290 million - Rs. 2.9 billion), liquidity and profitability. It has a market capitalisation of Rs. 40 billion. The index has higher exposure to the Banking and Finance, Manufacturing and Food and Beverage sectors which together account for 76 per cent of the total market capitalisation of the index. The Food and Beverage sector accounts for the highest sector weightage 32 per cent followed by the Banking, Finance and Insurance sector 24 per cent and the Manufacturing sector 20 per cent. The remaining 24 per cent weightage is shared among Chemicals and Pharmaceuticals nine per cent, Hotels and Travels five percent, Construction and Engineering four per cent and other sectors six per cent. The return on the MBSL Midcap Index over the last four year period (1999 - 2002) without dividends, was around 19 per cent while the return on the MPI was 12 per cent over the same period. During this four-year period, the Midcap sustained above average returns in both the upward and downward trends of the stock market. |
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| Editorial | Security Produced by Lake House |
