CSE Investing Glossary

ASPI – All Share Price Index

The ASPI is the broadest benchmark index for the Colombo Stock Exchange, tracking the price movements of all ordinary shares listed on the CSE.

S&P SL 20 Index

The S&P SL 20 is a blue-chip index tracking the 20 most liquid and largest companies on the Colombo Stock Exchange.

Turnover (Trading Turnover)

Trading turnover is the total value of shares traded on the exchange or in a specific stock during a given period, typically expressed in LKR.

Volume (Share Volume)

Volume is the total number of shares traded in a stock or across the entire market during a trading session.

Liquidity

Liquidity describes how easily a stock can be bought or sold in the market without significantly affecting its price.

Market Breadth

Market breadth measures the participation level of the overall market by counting how many stocks are advancing versus declining on a given day.

Blue-Chip Stock

A blue-chip stock is a share in a large, well-established, and financially sound company with a long record of consistent performance.

Portfolio Diversification

Portfolio diversification means spreading investments across different stocks, sectors, and asset classes to reduce the impact of any single investment going wrong.

Bear Market & Bull Market

A bull market describes rising market prices and optimism; a bear market describes falling prices and pessimism, conventionally defined as a 20% decline from a recent peak.

Market Capitalisation

Market capitalisation is the total market value of a company's outstanding shares, calculated by multiplying its share price by the number of shares on issue.

P/E Ratio – Price to Earnings

The price-to-earnings ratio compares a company's share price to its earnings per share, showing how much investors are paying for each rupee of profit.

Earnings Per Share (EPS)

Earnings per share is the portion of a company's profit allocated to each outstanding ordinary share.

Dividend Yield

Dividend yield expresses a company's annual dividend payment as a percentage of its current share price, showing the income return per rupee invested.

Book Value Per Share

Book value per share is the net asset value of a company divided by its number of outstanding shares — what shareholders would theoretically receive per share if the company were liquidated.

NAV – Net Asset Value

Net Asset Value is the per-unit or per-share value of a fund or company calculated by subtracting liabilities from total assets.

Dividend

A dividend is a portion of a company's profits paid out to shareholders, usually expressed as a fixed amount per share.

IPO – Initial Public Offering

An IPO is the process by which a private company offers its shares to the public for the first time by listing on a stock exchange.

Rights Issue

A rights issue is when a listed company offers existing shareholders the right to purchase additional new shares at a discounted price, typically in proportion to their current holdings.

Bonus Shares

Bonus shares are free additional shares issued to existing shareholders in proportion to their current holdings, funded from the company's retained earnings or reserves.

Share Split

A share split increases the number of outstanding shares by dividing existing shares into multiple new ones, proportionally reducing the share price.

Annual Report

The annual report is a comprehensive document published yearly by a listed company that includes audited financial statements, management discussion, and governance disclosures.

Stop-Loss

A stop-loss is a pre-set price level at which you commit to selling a stock to limit your downside if the trade moves against you.

Market Order vs Limit Order

A market order buys or sells immediately at the best available price; a limit order only executes at your specified price or better.

Debenture

A debenture is a type of fixed-income debt instrument issued by a company, which pays the holder regular interest and repays the face value at maturity.

Warrant

A warrant gives the holder the right, but not the obligation, to purchase a company's shares at a set price before a defined expiry date.

CDS Account

A CDS (Central Depository System) account is the mandatory electronic account that holds your CSE share ownership records in dematerialised form.

CSE – Colombo Stock Exchange

The Colombo Stock Exchange is Sri Lanka's only licensed stock exchange, where shares of listed companies are bought and sold during regulated trading hours.

SEC – Securities and Exchange Commission

The Securities and Exchange Commission of Sri Lanka is the government regulator responsible for overseeing and regulating the country's capital markets.

Stockbroker / CSE Member Firm

A stockbroker is a licensed firm (CSE member) authorised to execute buy and sell orders on behalf of investors on the Colombo Stock Exchange.

Capital Gains

Capital gains are profits realised when you sell an asset — such as a share — for more than you paid for it.