@The Alchemist wrote:
@knockknobbler - If you followed trading yesterday and today, you will observe the Nestle / Odd Lot effect on the Index. Yesterday especially. and adjustment to the Index after trading hours and not in real time, distorts the reality.
As I understand ( from the descriptions given in CSE site ) .......,
1. during the trading period , CSE takes into "Last Traded Price " in computing ASI and ASI is changing when the time goes on.
2. after trading is closed, CSE uses "Volume Weighted Average Price" in computing ASI and ASI indicates a fixed value .
Since this basis of computations are clearly indicated , everyone can understand this, any change of ASI value during trading hours ,specially at the closing time ( based on last traded price)and after the trading is closed ( based on VWA price) can be understood. My contention is there is no "manipulation " here.
The question you are raising is .., whether this method ,(2) above, distorts reality ?
I think, this is a subjective opinion, and needs further discussion.
Let's consider alternatives , there are two...,
1. use VWA price in computing ASI ,during trading hours.
2. use closing price (at the end of trading session) to express ASI ,after trading is closed.
It seems, from an earlier post, you prefer (1) above. However I tend to disagree.
During trading hours, CSE uses " last traded price " as market price in all statements /statistics. I agree with this. If it is online data, and data changes from time to time (every minute) , what is critical is latest data (not VWA price). That should be used in Index computation also.That gives the viewer a sense of latest position.
I agree with (2) above. But, I expect a huge cry, saying that this computation distort the market "reality '. There is a valid point in that " CRY" also, in the case of Colombo Stock Exchange (or any small exchange, for that matter) and there will be an issue.
Actually, the issue lies somewhere else. It is the nature of CSE, it is not a mature exchange. If we think about "whole market " totals,computations are heavily skewed , towards a set of few companies. An exchange / market means , there are a large number of buyers /sellers and the possibility of a single /(small no. of) player/s to influence the "total " should be minimum.