MBSL announces changes in MIDCAP with year-end index rebalance

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-sized 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 Capitalization, 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 withstand 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 generates 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 capitalization in the coming year.

MBSL MIDCAP Index which is in effect from 01 January 2019 and the criteria for selecting the twenty-five stocks of the index remained unchanged. They are;

2018: Middle Range Market Capitalization as at 30 November 2018

2019: Liquidity based on the number of trades during the year

2020: Profitability within the last two years

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

Based on the above criteria the MBSL MIDCAP index 2019 includes the following stocks representing 09 sectors.

 

  Company Sectors
1 SOFTLOGIC LIFE INSURANCE PLC
2 CENTRAL FINANCE COMPANY PLC
3 HNB ASSURANCE PLC
4 JANASHAKTHI INSURANCE COMPANY PLC
5 LOLC FINANCE PLC
6 NATIONS TRUST BANK PLC
7 SANASA DEVELOPMENT BANK PLC
8 UNION ASSURANCE PLC
9 UNION BANK OF COLOMBO PLC
10 COMMERCIAL BANK OF CEYLON PLC (NV)
11 HATTON NATIONAL BANK PLC (NV)
12 SEYLAN BANK PLC (NV) BANKS FINANCE & INSURANCE
13 DUNAMIS CAPITAL PLC
14 EXPOLANKA HOLDINGS PLC
15 RICHARD PIERIS AND COMPANY PLC
16 AITKEN SPENCE PLC
17 VALLIBEL ONE PLC DIVERSIFIED HOLDINGS
18 TOKYO CEMENT COMPANY (LANKA) PLC
19 TOKYO CEMENT COMPANY (LANKA) PLC (NV) MANUFACTURING
20 ODEL PLC FOOTWEAR & TEXTILES
21 SINGER (SRILANKA) PLC TRADING
22 ACCESS ENGINEERING PLC CONSTRUCTION & ENGINEERING
23 AMBEON HOLDINGS PLC INVESTMENT TRUST
24 VALLIBEL POWER ERATHNA PLC POWER & ENERGY
25 R I L PROPERTY PLC LAND & PROPERTY

The new inclusions to MBSL MIDCAP Index 2019 and exclusions from MBSL MIDCAP 2018 are as follows.

Exclusions Inclusions
NATIONAL DEVELOPMENT BANK PLC
PAN ASIA BANKING CORPORATION PLC
PEOPLE’S INSURANCE PLC
SEYLAN BANK PLC
SINGER FINANCE (LANKA) PLC
VALLIBEL FINANCE PLC
PIRAMAL GLASS CEYLON PLC
ROYAL CERAMICS LANKA PLC
SUNSHINE HOLDINGS PLC
NAWALOKE HOSPITALS PLC
THREE ACRE FARMS PLC
UNITED MOTORS LANKA PLC
WATAWALA PLANTATIONS PLC
CENTRAL FINANCE COMPANY PLC
HNB ASSURANCE PLC
JANASHAKTHI INSURANCE COMPANY PLC
LOLC FINANCE PLC
COMMERCIAL BANK OF CEYLON PLC (NV)
HATTON NATIONAL BANK PLC (NV)
ACCESS ENGINEERING PLC
DUNAMIS CAPITAL PLC
EXPOLANKA HOLDINGS PLC
RICHARD PIERIS AND COMPANY PLC
AITKEN SPENCE PLC
AMBEON HOLDINGS PLC
R I L PROPERTY PLC

Midcap index for the last six years

MIDCAP