FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com


Join the forum, it's quick and easy

FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com
FINANCIAL CHRONICLE™
Would you like to react to this message? Create an account in a few clicks or log in to continue.
FINANCIAL CHRONICLE™

Encyclopedia of Latest news, reviews, discussions and analysis of stock market and investment opportunities in Sri Lanka

LISTED COMPANIES

Submit Post


ADVERTS

Poll

EXCHANGE RATE PREDICTION: 2022

CSE to phase out Milanka Index? Vote_lcap16%CSE to phase out Milanka Index? Vote_rcap 16% [ 43 ]
CSE to phase out Milanka Index? Vote_lcap21%CSE to phase out Milanka Index? Vote_rcap 21% [ 57 ]
CSE to phase out Milanka Index? Vote_lcap30%CSE to phase out Milanka Index? Vote_rcap 30% [ 83 ]
CSE to phase out Milanka Index? Vote_lcap34%CSE to phase out Milanka Index? Vote_rcap 34% [ 93 ]

Total Votes : 276

ශ්‍රී ලංකා මූල්‍ය වංශකථාව - සිංහල
Submit Post


CONATCT US


Send your suggestions and comments

* - required fields

Read FINANCIAL CHRONICLE™ Disclaimer



Latest topics

» Sri Lanka bond yields extend fall on DDR comments
by K.R Yesterday at 6:12 pm

» The rupee was now ‘heavily undervalued’ based on fundamentals - Central Bank Governor Nandalal Weerasinghe
by K.R Yesterday at 3:02 pm

» LOLC FINANCE PLC (LOFC.N0000)
by Riz123 Yesterday at 1:45 pm

» CIC going to next level
by suku502 Yesterday at 12:13 pm

» PMB/PLC/PINS
by K.R Yesterday at 12:03 pm

» What will happen tomorrow?
by K.R Thu Nov 24, 2022 7:56 am

» CENTRAL INDUSTRIES PLC (CIND.N0000)
by ErangaDS Wed Nov 23, 2022 6:34 pm

» KZOO.N SHAW WALLACE INVESTMENTS PLC TP 10/
by cheetah Wed Nov 23, 2022 11:16 am

» SUNSHINE HOLDINGS PLC (SUN.N0000)
by ErangaDS Wed Nov 23, 2022 6:53 am

» SRI LANKA TELECOM (SLTL.N0000) - Reawakening the Giant
by Equity Win Tue Nov 22, 2022 12:10 pm

» EXTERMINATORS PLC (EXT.N0000)
by ErangaDS Tue Nov 22, 2022 10:35 am

» Focus on Government controlled entities
by K.R Sun Nov 20, 2022 10:45 am

» Singapore based Kreate Design to invest USD 1 Billion to Colombo Lotus Tower
by K.R Sat Nov 19, 2022 1:40 pm

» China working with other lenders on ‘easing’ Sri Lanka debt
by K.R Sat Nov 19, 2022 1:31 pm

» Billionaire owned listed companies faces insolvency issues in Sri Lanka
by God Father Sat Nov 19, 2022 10:11 am

» Wahts going on with Expo
by sanjayaK Fri Nov 18, 2022 2:23 pm

» REGULATORS - DUTY OF CARE
by God Father Fri Nov 18, 2022 1:47 pm

» PEOPLE'S INSURANCE PLC (PINS.N0000)
by K.R Tue Nov 15, 2022 8:03 pm

» LANKA HOSPITAL + SRI LANKA TELECOM + HOUSING DEVELOPMENT COOPERATION
by nish84 Tue Nov 15, 2022 4:29 pm

» SEYLAN DEVELOPMENTS PLC (CSD.N0000)
by Thushara Ayya Tue Nov 15, 2022 10:16 am

EXPERT CHRONICLE™

MARKET CHAT


ECONOMIC CHRONICLE

GROSS DOMESTIC PRODUCT (GDP)


CHRONICLE™ YouTube

LATEST TWEETS

You are not connected. Please login or register

FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ » CSE to phase out Milanka Index?

CSE to phase out Milanka Index?

2 posters

Go down  Message [Page 1 of 1]

1CSE to phase out Milanka Index? Empty CSE to phase out Milanka Index? Sun Jul 08, 2012 1:08 am

sriranga

sriranga
Co-Admin

Written by Azhar Razak
With the recent introduction of the globally accepted stock market index S&P Sri Lanka 20 to the Colombo Bourse, the Colombo Stock Exchange (CSE) is likely to gradually phase out the existing Milanka Price Index (MPI), which tracks the performance of 25 most liquid stocks of the CSE, the Nation Gain reliably learns.

“There will be a phasing out at some point depending on the direction of the market in the future,” a top official from CSE said on the condition of anonymity.

Of late, the selection of firms to the composition of the MPI has been questioned by market analysts as several stocks which did not have strong fundamentals have been included in the list, whilst the more sound and larger capitalized firms have been left out.

Analysts criticize that the main criteria used for the selection of the companies to the index, which is liquidity, is not itself foolproof, and could be distorted as the selection criteria is based on past data which may not be representative of future trading.

“Sometimes, one or two large trades can completely distort the averages. One doesn’t know if the formula being used for selection avoids such one-off trades or whether these trades are being used. Liquidity for certain companies recently included in the Milanka Index has also arisen through Directors trading in their own company’s shares with related parties, and such trades should be excluded,” an analyst argued.

A fund manager mentioned that they do not use the MPI to track performance against their funds given the inclusion of many fundamentally weak stocks, and said the MPI has lost credibility. He pointed out that the current composition of the MPI was, however, a reflection on recent trading patterns on the CSE, with many fundamentally strong stocks being ignored by local traders who were more concerned with trying to make quick returns on highly speculative shares.

When asked for a response to this from CSE manager research, Nishantha Hewawithana, he admitted that companies have been selected into the MPI depending on overall performance in the previous four quarters and this did not exclude exceptional trades.

“As you said, this can be a drawback in identifying the correct composition,” Hewawithana acknowledged. The CSE presently reviews and revises the companies to be included in the MPI biannually with the criteria taken into account in its construction are size and liquidity.

According to Hewawithana, size is measured by the average of market capitalization of companies as at end of the immediately preceding 4 quarters of the date of evaluation whilst liquidity is measured by number of trades excluding odd lot trades executed over the one full year period immediately preceding the date of evaluation.

The MPI, which was introduced in 1999, is calculated by dividing the market capitalization of the 25 Milanka companies with its base market capitalization of the same companies.

CSE to phase out Milanka Index? Sada-p10
http://www.nation.lk/edition/biz-news/item/7971-cse-to-phase-out-milanka-index?.html

http://sharemarket-srilanka.blogspot.co.uk/

2CSE to phase out Milanka Index? Empty Re: CSE to phase out Milanka Index? Sun Jul 08, 2012 2:36 pm

Redbulls

Redbulls
Director - Equity Analytics
Director - Equity Analytics

Introducing new index or phasing out existing one do not help at this moment.
Building investors trust in the system is needed at this point.

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum