Sri Lanka MBSL Midcap Index Passes 10000 Points. Measures Performance of Medium Size Companies on CSE

26th July 2010, www.lankabusinessonline.com

An index of stocks by the Merchant Bank of Sri Lanka has been rising in tandem with the rest of the market in a post-war boom and crossed the 10,000 points mark, a statement said.

The MBSL Midcap index of 25 stocks, which was launched in 1999 and is revised annually, provides a clear direction for growth-oriented stocks, the bank said.

The index is now at 10,029.78 points.

The stocks are selected on three criteria: market capitalization of medium-scale entities, liquidity of the stock and profitability during the last two years.

The MBSL Midcap Index is on an upward momentum, indicating a wider range compared to the All Share Price Index and Milanka Price Index, the statement said.

"Market earnings potential in the new era of positive momentum and the increase in tourism were driving most of the medium market capitalisation companies while sector-based favourable conditions have been driving most of the equities in the Colombo Stock Exchange."

Sri Lanka's 30-year ethnic war by Tamil separatists in the north and east ended in May 2009, leading to an economic upturn and a boom in the stock market, which is ranked as one of Asia's best-performing bourses this year.

The Midcap index has risen by 115 percent in the year to June 1, 2010 compared with a rise of 122 percent in the overall ASPI and 121 percent in the more sensitive Milanka index.

"The midcap index has moved on a lower percentage to the ASPI and Milanka index," the MBSL statement said.

"This is an indication for strong midcap companies to have growth prospects for the future and from the business opportunities arising from the eastern and northern provinces."