MBSL Midcap Index revised

The Merchant Bank of Sri Lanka Limited (MBSL) will revise its MBSL Midcap Index from tomorrow. The index which was launched in 1999 is revised annually. The criteria for selecting the twenty-five stocks of the index remain unchanged and are: Middle range market capitalisation, Liquidity and Profitability.

The range for market capitalisation in the year 2002 was Rs. 200 million - Rs. 2 Billion. In view of the stock market becoming more active, this range was adjusted considering the movements in the ASPI annually. Accordingly, the range was adjusted on market capitalisation for the year 2007 which is Rs. 1.030 Billion - Rs. 10.30 Billion.

Revision at end of 2006 has resulted in the replacement of ten new companies in the Index. The additions to the Index are Richard Pieris and Company Ltd, Aitken Spence and Company Ltd, Hayleys Ltd, Ceylon Guardian Investment Trust Ltd, Associated Motorways Ltd, Sierra Cables Ltd, United Motors Lanka Ltd, Ceylon Oxygen Ltd, Asiri Medical Services Ltd and Kelani Cables Ltd.

The outgoing stocks are Lanka Ceramics Ltd, Ceylon Investment Company Ltd, Dipped Products Ltd, Colombo Dockyard Ltd, Ceylon Grain Elevators Ltd, Hayleys MGT Knitting Mills Ltd, Nawaloka Hospitals Ltd, Taj Lanka Ltd, The Finance Company Ltd and Tokyo Cement Lanka Ltd.

The MBSL Midcap Index had the base as 1000 as at December 31, 1998 (which is the same as the Milanka Index). The index recorded an all-time high of 4801 on December 1, 2006. Stocks are diversified over seven sectors.

The manufacturing sector accounts to 36% of the total number of stocks in the index whilst the balance 64% is divided among Bank Finance and Insurance sector, Diversified sector, Investment and Trust sector, Land and Property sector, Motors sector and Healthcare sector.

However, the base on the total market capitalisation manufacturing sector contributed by 21%, Diversified sector by 30% and Bank Finance and Insurance sector by 25%. The Midcap index return for the first 11 months of 2006 was 43% against the return of 18% in 2005.