Nov 15, Colombo: Sri Lanka's Colombo Stock Exchange (CSE) has decided to discontinue its highly volatile Milanka Price Index (MPI) at the end of this year.

The bourse will replace the capitalization weighted MPI which tracks the 25 best performing stocks in the market with the newly introduced S&P Sri Lanka 20, a CSE spokesman said.

S&P Sri Lanka 20 designed to measure the performance of 20 leading Sri Lankan companies in terms of market capitalization has been developed in partnership with the Colombo Stock Exchange (CSE).

The new Index launched on June 26, 2012 covers the largest and most liquid stocks from the Sri Lankan equity market, yet also be efficient to replicate, with possible application for index funds and ETFs.

The S&P Sri Lanka 20 is based on S&P Indices' global index methodology, which provides consistency, transparency and liquidity. The index has been designed in accordance with international practices and standards.

To be eligible for inclusion in the S&P Sri Lanka 20, a stock must have a minimum float-adjusted market capitalization of Rs.500 million, a six-month average daily value traded of Rs.1 million, should 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.