PURPOSE OF MIDCAP INDEX In a pioneering move, MBSL constructed a Stock market Index: the "MBSL Midcap Index", which measures the aggregate price level and price movements of medium size companies listed on the Colombo Stock Exchange (CSE). The All Share Price Index (ASPI) measures the share price movements of all the stocks listed on the CSE whilst the Milanka Price Index (MPI) measures the price movement of highly capitalized companies listed on the CSE. There was no index to measure the price movement of medium sized companies listed on the CSE. The MBSL Midcap Index filled the vacuum. BENEFITS OF THE MBSL MIDCAP INDEX MBSL Midcap Index can be used as the benchmark index by individual and institutional investors who prefer growth but are prepared to with stand only conservative levels of volatility in their equity investments. It can be used as the benchmark index for the introduction of Midcap linked Index funds. The Midcap Index, together with the Milanka Price Index (MPI) generate valuable signals for portfolio managers for switching between larger-cap more sensitive stocks and the midcap less sensitive stocks in response to changing capital market conditions. COMPOSITION OF THE MBSL MIDCAP INDEX The MBSL Midcap Index is revised annually. The last revision was effect on 2 January 2003. The composition of the revised MBSL Midcap Index is as follows.
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