S&P Sri Lanka 20 Index Launched

S&P Sri Lanka 20 Index jointly developed by CSE and Standard & Poor's Indices launched: CSE, S&P - LBO SMS

Colombo, June 26, 2012 – S&P Indices announces today the launch of the S&P Sri Lanka 20, which has been jointly developed with the Colombo Stock Exchange (CSE). The Index is designed to be representative of the Sri Lankan equity market, yet also be efficient to replicate, with possible application for index funds and ETFs.

The Index includes the largest 20 stocks, by total market capitalization, listed on the CSE that meet minimum size, liquidity and financial viability thresholds.The constituents are weighted by float-adjusted market capitalization, subject to a single stock cap of 15%, which is employed to enhance portfolio diversification.

Alka Banerjee, Vice President, Global Equity & Strategy Indices at S&P Indices commented: “The S&P Sri Lanka 20 Index was created to help both local and international investors gauge the performance of the Sri Lankan equity market. In recent years, there has been increased interest in Sri Lankan equities from both domestic and international investors, which has spurred demand for a Sri Lankan equity benchmark capable of supporting index-linked financial products.”

Krishan Balendra, Chairman of Colombo Stock Exchange commented: “The CSE has embarked on a focused transformation programme targeting issuers, investors and intermediaries. In the sequencing of the initiative, launching a co-branded index with S&P Indices was ranked for implementation in Q2 of 2012. I am confident that a credible and transparent index will positively impact the market.”

The S&P Sri Lanka 20 has been designed in accordance with international practices and standards. All stocks are classified according to the Global Industry Classification Standard (GICS®), which was co- developed by S&P Indices and MCSI and is widely used by market participants throughout the world.

The Index employs a transparent, rules-based methodology, adjusts for available float and employs inclusion thresholds necessary to enhance tradability.To be eligible for inclusion, a stock must have a minimum float-adjusted market capitalization of 500 million Sri Lankan rupees (Rs), a six-month average daily value traded of Rs 1 millionshould have traded at least 10 days of each month for the three months prior to the rebalancing reference date, and a positive net income over the 12 months prior to the rebalancing reference date.


The current 20 stocks in the S&P Sri Lanka 20 are:



Tickers for the S&P Sri Lanka 20 are listed in the table below:




For more information, including the complete methodology, please visit:
www.standardandpoors.com/indices.

About S&P Indices
S&P Indices, a leading brand of the McGraw-Hill Companies (NYSE:MHP), maintains a wide variety of investable and benchmark indices to meet an array of investor needs. Over $1.45 trillion is directly indexed to our indices, which includes the S&P 500, the world's most followed stock market index, the S&P/Case- Shiller Home Price Indices, the leading measure of U.S. home prices, the S&P Global BMI, an index with approximately 11,000 constituents, the S&P GSCI, the industry's most closely watched commodities index, and the S&P National AMT-Free Municipal Bond Index, the premier investable index for U.S. municipal bonds. For more information, please visit: www.standardandpoors.com/indices.

It is not possible to invest directly in an index. S&P Indices does not sponsor, endorse, sell, or promote any S&P index-based investment product. This document does not constitute an offer of services in jurisdictions where S&P Indices or its affiliates do not have the necessary licenses. S&P Indices receives compensation in connection with licensing its indices to third parties.

About CSE
The Colombo Stock Exchange (CSE) operates the only share market in Sri Lanka and is responsible for providing a transparent and regulated environment where companies and investors can come together. The CSE is a company that is limited by guarantee established under the Laws of Sri Lanka. The CSE is licensed by the Securities and Exchange Commission of Sri Lanka (SEC) and is a mutual exchange consisting of 15 Members and 14 Trading Members. All Members and Trading Members are licensed by the SEC to operate as Stockbrokers. For more information, please visit: www.cse.lk.

For more information:

David R. Guarino Communications S&P Indices
S&P Indices
dave_guarino@standardandpoors.com
212-438-1471

Haw-Yan Man/Paul Farrow
Fishburn Hedges
+44 (0)20 7839 4321 standardandpoors@fishburn-hedges.co.uk


NishanthaHewavithana Manager Research Colombo Stock Exchange
+94 112 356524
nishanthah@cse.lk

Source:http://www.cse.lk/cmt/upload_cse_announcements/4301340710617_.pdf

Well balanced basket of Stocks.
Something like blue chips with a silver lining!

Cheers!

Interesting, directly five banks which have been rated as risky by S and P.

I think this is a good move..

But many have accused that these high caps were used for index manipulation.

yes this is a index manipulation... soon ASI will pass 6000

this is the chance to bull run blue chip companies such as Samp,Dist,RCL,DOCK

BullFan wrote:yes this is a index manipulation... soon ASI will pass 6000

I do not think due to the introduction ASPI can move to 6000 soon?

finally it came out

http://forum.srilankaequity.com/t3288-what-would-be-the-new-index

Whitebull wrote:Interesting, directly five banks which have been rated as risky by S and P.

I think many have misunderstood S&F report on risk ratings of Banks & Finance Sector of Sri Lanka. If one reads their subsequent clarification which is also posted here as a separate thread it is clear that their rating is a generalised one on the entire Bank & Finance sector of Sri Lanka and it has no any bank specific comments or ratings. Bank specific ratings are given separate and in terms of those ratings these banks listed under S&P index have no risk at all.

What has happened is when both banks & finance companies are taken together the weakness in few banks or almost all finance companies (yes they are vulnarable to high risks) the good ratings of the banking sector was dragged down drastically.

Therefore, investors need to look for company specific reports rather than sector reports of rating agencies when selecting institutions for investing. Of course multinational lending agencies might look at sector wise ratings when they lend money to the GOSL or a specific sector in the economy.

Every one know that bank sector shares were down after the report due to this misunderstanding. I blame the so called business pages of national news papers (they should not write misleading titles to such reports) and the CB which statred attacking the report by reading only the misleading title. I think, the CB has not read the entire report when they criticized the report. The CB foolishly took on the S&P without giving their professional opinion to the investors. The CB now has become so politicized that no sooner the report was out they started to hammer the report without reading it.

What the CB should do now is to strengthen their supervision on the sector (especially on the finance companies) and also remedy the conflict of interest issues highlighted on its EPF investment criteria without barking at the S&P. Other recommendations are also need to be looked at such as devestiture of Govt., owned banks.

K.Haputantri wrote:

Whitebull wrote:Interesting, directly five banks which have been rated as risky by S and P.

I think many have misunderstood S&F report on risk ratings of Banks & Finance Sector of Sri Lanka. If one reads their subsequent clarification which is also posted here as a separate thread it is clear that their rating is a generalised one on the entire Bank & Finance sector of Sri Lanka and it has no any bank specific comments or ratings. Bank specific ratings are given separate and in terms of those ratings these banks listed under S&P index have no risk at all.

What has happened is when both banks & finance companies are taken together the weakness in few banks or almost all finance companies (yes they are vulnarable to high risks) the good ratings of the banking sector was dragged down drastically.

Therefore, investors need to look for company specific reports rather than sector reports of rating agencies when selecting institutions for investing. Of course multinational lending agencies might look at sector wise ratings when they lend money to the GOSL or a specific sector in the economy.

Every one know that bank sector shares were down after the report due to this misunderstanding. I blame the so called business pages of national news papers (they should not write misleading titles to such reports) and the CB which statred attacking the report by reading only the misleading title. I think, the CB has not read the entire report when they criticized the report. The CB foolishly took on the S&P without giving their professional openion to the investors. The CB now has become so politicized that no sooner the report was out they started to hammer the report without reading it.

Salute your comment.
Well said Sir.