'MBSL Midcap Index' fills vacuum

MBSL constructed a Stock Market Index- the 'MBSL Midcap Index', which measures the aggregate price level and price movements of medium sized companies listed on the Colombo Stock Exchange (CSE). There was no index to measure the price movement of medium sized companies listed on the CSE and hence the 'MBSL Midcap Index' filled this vacuum.

Many large-cap shares generally reach the maturity stage since the turnover and profits of large companies are already high in the context of that particular market. In that respect, mid-cap shares are considered an attractive investment avenue because their growth rate will be comparably higher. Midcap companies are generally in the growth momentum in their life cycles.

Thus, they may or may not pay a dividend, often deciding to continue to reinvest in growing future operations and earning ability. For investors looking for stock price appreciation, mid cap companies provide a fertile hunting ground. However, on the flip side, mid-cap shares are of small companies, where revenue and profits could be more volatile than larger companies.

The index which came into operation in 1999 is revised annually and looks at the Middle Range Market Capitalisation, Liquidity and the Profitability of the firms to be included in the Midcap Index.