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Methodology revision of All Share Price Index

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Nishantha Hewavithana Head of Research and Strategy

Colombo Stock Exchange (CSE) is planning to revise the calculation methodology of All Share Price Index (ASPI) by changing the constituent weighting method from full Market Capitalization to free float-adjusted Market Capitalization. The following interview intends to provide some essential information in this regard.

1. What is a stock market index and the purpose of it?

A stock market index is a statistical measure which shows changes taking place in the stock market. Hence, an index reflects overall market sentiment and direction of price movements of the stock market. These indices can be calculated for the whole market (broad market index), a select segment (sector indices) or based on any other theme (eg; Dividend Index, ESG Index etc.). Indices are mainly useful in determining the return of the market segment, understanding the overall market direction.

2. What are the different types of calculation methodologies?

There are various types of calculation methodologies based on different aspects. One such aspect is the weighting of index constituents. Two major weighting schemers are weighting index constituents on full market capitalization of each constituent and weighting index constituents on float adjusted market capitalization of each constituent.

3. What is float adjusted market capitalization?

Simply, this means total market capitalization multiplied by the public holding percentage. Public holding is the portion of the issued quantity of shares readily available for investors to trade and expressed as a percentage. This is calculated by companies and disclosed in interim financial statements. The definition of public holding can be found in ‘Contents Definitions and Introduction’ under Listing Rules that can be accessed at https://cdn.cse.lk/pdf/cse-rules/listing-rules/Contents-Updated-as-at-22-06-2021.pdf

For example, in a given company the public holding percentage is 19% means that only 19% of the issued quantity of shares are readily available to go hand in hand among investors in general. The balance 81% is held by strategic investors which we cannot expect to be traded in the market in general. Accordingly, 19% of the market capitalization (known as float adjusted market capitalization) is ready to go hand in hand- on daily basis.

4. What is the ASPI methodology revision of 2022?

The ASPI has been calculated based on full market capitalization which means the index constituents are weighted based on the full market capitalization of each security. Alternatively, it could be weighed on float adjusted market capitalization. The revision is to change the weighting scheme from full market capitalization to float adjusted market capitalization.

Since companies disclose public holding quarterly in their interim financial statements the index weights would be revised quarterly (known as Index Rebalancing).

5. What is capping and why capped at 5%?

Capping is the technique use in index calculation to address the issue of over representation of one of few securities in an index. Index is capped at 5% level to address the issue of over representation of one of few securities in an index. Once capped the excess weight is distributed proportionately among the remaining securities in the index. The same procedure is repeated until no security is exceeding 5% cap rate.

We back calculate Float ASPI index and capped at different cap rates. Based on return per unit of risk, 5% capping level has been the best.

6. What makes CSE to move for this kind of change?

Indices based on float adjusted market capitalization are better able to generate realistic market returns than those based on total market capitalization because they are based on tradable quantities.

Since the introduction of this idea in early 2000, most of the markets have adopted this in their index calculation methodologies. All the index service providers such as S&P Dow Jones, FTSE are using this method and is considered as a best practice in index calculation methodologies.

7. What are the advantages and disadvantages of this move?

The main advantages of the revised index would be that it will generate more realistic returns and the index methodology would be in par with generally accepted best practices of index calculations. There are no disadvantages such.

8. Will the ASPI index value change suddenly due to the implementation this change itself?

No. On the effective date of the methodology revision the ASPI will start moving from the same value that it closed on the day immediately prior to the revision. When this methodology revision is implemented, the serial continuity of the index will be maintained and there will be no sudden shift of the index level solely due to the launch of the new index.

9. How will it affect the ASTRI index (All Share Total Return Index)?

All share Total Return Index (ASTRI) measures the total return (Price Return + Dividend Return). The ASTRI reflects returns due to both price changes and dividend income. After the implementation of the methodology revision of ASPI, the price return component will be based on float adjusted market capitalization. This means that ASTRI is also calculated based on float adjusted market capitalization

10. Is the index methodology of CSE publicly available?

Yes. It is available on CSE website. https://cdn.cse.lk/pdf/Index-Methodologies-of-Colombo-Stock-Exchanhge.pdf



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HNB Assurance Recognized with Merit Award at the Great HR Awards 2025

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Team HNBA at the Great HR Awards

HNB Assurance PLC was recognized at the Great HR Awards 2025, receiving the Merit Award in the Finance, Insurance, Real Estate, and Investment sector. This recognition reflects the company’s continued commitment to strengthening its people strategy, nurturing a progressive culture, leveraging technology and maintaining strong industrial relations.

Sharing his thoughts on this accomplishment, Lasitha Wimalarathne, Executive Director / Chief Executive Officer of HNB Assurance PLC, stated, “This recognition reiterates our belief that people are the true drivers of our success. Over the years, we have invested significantly in building an environment where our teams feel inspired and supported to deliver their best. As we continue to grow as one of Sri Lanka’s best insurance companies, this award reflects our ongoing efforts to build a workplace where both our people and our business can thrive. My sincere thanks go out to our HR team for continuously driving these initiatives.”

Commenting on the award, Navin Rupasinghe, Head of HR / DGM at HNB Assurance PLC, said, “Our people-first philosophy shapes every HR initiative we design, from strengthening learning pathways and leadership development to enhancing employee well-being and engagement. This recognition validates our ongoing efforts to build a workplace culture grounded in trust, inclusivity and performance. As we look ahead, we remain committed to evolving our HR practices to meet the expectations of our people and the future of work. My sincere thanks to the CIPM for this recignition.”

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MullenLowe Sri Lanka named Creative Agency of the Year in South Asia

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MullenLowe Sri Lanka has been awarded Gold as the Rest of South Asia’s Creative Agency of the Year at the Campaign Agency of the Year Awards 2025, held recently at Mumbai’s ITC Maratha Hotel. The accolade marks a landmark year for the agency, driven by breakthrough ideas, ambitious brands, and a surge in economic activity.

Campaign Agency of the Year – South Asia 2025 (Rest of South Asia – Creative Agency) awarded to MullenLowe Sri Lanka

Guided by a clear creative vision and extensive category expertise across 111 brands in 33 sectors, MullenLowe strengthened its position through strategic leadership appointments, talent acquisition, and the integration of AI-enabled tools. These initiatives created an environment where creativity, learning, and commercial impact worked in tandem, supporting long-standing client relationships and consistent new business momentum.

Thayalan Bartlett, Executive Chairman, said, “Our growth is rooted in a people-first, creative-centred culture. By attracting top talent and focusing on continuous upskilling, we have enriched both our creative and strategic capabilities.”

The agency’s innovation was further enhanced by Fever, its AI-enabled production studio, and LoweGo, a subscription-based design unit, enabling faster and more scalable solutions for modern marketers. Training programs, including an international AI workshop in Baku for top creative minds, helped unify teams around technology-driven creativity, leading to MullenLowe’s highest Effie points haul in a decade.

Harendra Uyanage, Senior Vice President and Executive Creative Director, added, “This recognition celebrates a team that constantly stretches its creative boundaries, transforming every brief into opportunity.”

The win adds to a series of recent accolades, including Most Effective Agency of the Year at the 2024 Effie Awards, and multiple awards at Dragons of Sri Lanka and SLIM Digis 2025, cementing MullenLowe’s vision to become Sri Lanka’s most commercially impactful creative company by 2030.

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ComBank named Sri Lanka’s Best Trade Finance Bank at Euromoney Awards 2025

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Com Bank honoured for outstanding support to Sri Lanka’s trade sector

The Commercial Bank of Ceylon PLC was named Sri Lanka’s Best Trade Finance Bank at the prestigious Euromoney Transaction Banking Awards 2025, in recognition of the Bank’s strong performance and continued contribution to supporting Sri Lanka’s export and import sectors.

This global recognition from Euromoney, a leading authority in financial markets, celebrates institutions that demonstrate innovation, leadership, and measurable impact in transaction banking across cash management, payments, trade finance, and technology. Commercial Bank is Sri Lanka’s clear market leader in trade finance, commanding a 21% share in exports and a 14.26% share in imports, demonstrating its strong presence across both segments.

In 2024, the Bank supported over US$ 5 billion in trade transactions, underscoring its unmatched role in enabling the flow of goods, services, and foreign exchange. Its leadership has also been recognised regionally by the Asian Development Bank (ADB), which named Commercial Bank its Leading Partner Bank in Sri Lanka for the fourth consecutive year under the Trade and Supply Chain Finance Programme.

At the forefront of Commercial Bank’s recent innovations is ComBank TradeLink, Sri Lanka’s first fully integrated, end-to-end digital trade finance platform. The system brings all trade finance operations – from Letters of Credit to export collections and shipping guarantees – into one secure online interface, providing customers real-time visibility, faster processing, and paperless convenience. This digitalisation drive has redefined the client experience, reduced manual processes and improved turnaround times across thousands of transactions.

The Bank’s commitment to advancing Sri Lanka’s trade sector extends beyond technology. Through initiatives such as the ComBank Trade Club, which facilitates connections between buyers and suppliers both locally and internationally, and ComBank LEAP | GlobalLinker, a digital business networking platform for SMEs, the Bank is actively building bridges between Sri Lankan entrepreneurs and global markets. Its Diribala Exporter Development Programme further empowers micro, small, and medium enterprises to become export-ready, providing access to expert guidance, training, and financial support.

Reflecting on the award, Commercial Bank said the recognition from Euromoney was a tribute to the trust placed in the Bank by Sri Lanka’s exporters and importers, and to the dedication of its trade finance teams who continue to innovate and deliver excellence in a rapidly evolving global landscape.

As Sri Lanka’s largest private sector bank and the first to surpass US$ 1 billion in market capitalisation, Commercial Bank continues to lead in supporting national trade, driving digital transformation, and shaping a more inclusive and resilient export economy, the Bank said.

Commercial Bank was the first bank in the country to be listed among the Top 1000 Banks of the World, and has the highest Tier I capital base among all Sri Lankan banks. The Bank is the largest private sector lender in Sri Lanka and the largest lender to the country’s SME sector. Commercial Bank is also a leader in digital innovation and is Sri Lanka’s first 100% carbon-neutral bank.

Commercial Bank operates a network of strategically located branches and automated machines island-wide, and has the widest international footprint among Sri Lankan banks, with 20 branches in Bangladesh, a fully-fledged Tier I Bank with a majority stake in the Maldives, a microfinance company in Myanmar, and a representative office in the Dubai International Financial Centre (DIFC). The Bank’s fully owned subsidiaries, CBC Finance Ltd. and Commercial Insurance Brokers (Pvt) Limited, also deliver a range of financial services via their own branch networks.

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