S&P Sri Lanka 20: What It Measures and How It Is Built

Direct Answer

The S&P Sri Lanka 20 is a rule-based measurement of Sri Lankan blue-chip equity benchmark, maintained by S&P DJI/CSE. Like every index it owns nothing: it is a number produced by applying a published weighting formula to a selected list of companies, revised on a schedule the provider sets.

What this index covers

The S&P Sri Lanka 20 covers Sri Lankan blue-chip equity benchmark, within the Sri Lanka market. S&P DJI/CSE defines which securities are eligible, how they are selected from that pool, and how much each one contributes to the published number.

The name states a target of 20 companies. A target is not a guarantee of the exact count on any given day: corporate actions, dual share classes and pending additions all move the real number around it.

How constituents are weighted

Float-adjusted market capitalization, with a 15% cap on any company applied at each quarterly rebalancing.

The weighting method is the single biggest driver of how an index behaves. Two indexes covering the same market can diverge for years purely because they weight differently, which is why comparing index levels without knowing the method tells you very little.

What qualifies for inclusion

Companies established in Sri Lanka and listed on the Colombo Stock Exchange, with float-adjusted market capitalization of at least LKR 500 million (LKR 300 million for current constituents) and positive net income over the latest 12 months. The 40 most liquid by six-month median daily value traded form the selection universe. Non-voting shares are eligible only if the voting class is eligible.

Eligibility rules are the part of an index most readers never look at and the part that decides what it can possibly measure. A screen that excludes a whole sector, or admits only one listing venue, shapes the result far more than any day of trading does.

How long a listing must exist first

Each eligible share class must trade on at least 10 days in each of the three months before the reconstitution reference date.

A seasoning rule is why a large new listing does not appear in an index the week it starts trading. It is a deliberate lag, and it means an index can under-represent a fast-growing part of the market for months at a time.

When the membership is revised

Rebalanced quarterly, effective at the open of the Monday after the third Friday of March, June, September and December, using prices from the Wednesday before the second Friday of the month. Reconstituted semiannually with the June and December rebalancings, with reference dates on the third Friday of May and November.

Reconstitution is the one date an index changes shape by design rather than by price. Funds tracking it have to trade toward the new membership, which is why the schedule matters to anyone holding the tracker rather than only to the provider.

The rule that surprises people

The index always holds 20 companies, but including non-voting share classes can put more than 20 stocks in it. Selection takes the top 16 by market capitalization, then current constituents ranked 17 to 24 to reach 20.

References

• S&P DJI/CSE: S&P Dow Jones Indices S&P Sri Lanka 20 Methodology, as published 2021. Every rule described on this page is taken from this document.

Current S&P Sri Lanka 20 constituents

S&P DJI/CSE publishes and licenses the S&P Sri Lanka 20 constituent list. Swoopr does not republish it here. The provider's own page is the authoritative source for current membership and weights.

S&P DJI/CSE: official S&P Sri Lanka 20 page

Related reading

• All stock market indexes: how indexes are built, weighted and revised.
• Emerging Markets indexes: others covering the same region.
• Index concentration: measuring how much of an index sits in its largest holdings.
• Index rebalancing and inclusion effects: what happens to a stock when index membership changes.

Frequently Asked Questions