Abstract:
This study analyzed the liquidity formation in the recently introduced index to the CSE, the S&P SL 20. The main focus of
the study was the depth of trading liquidity. Three possible influences on depth; timing, market condition and trading
volume, were identified. Regression and correlation analyses were used to test developed assertions. First regression model
tested the impact of time on share price. Second regression model tested the impact of time on share volume. Finally, the
impact of share volumes on share price was tested with correlation analysis. A highly and continuously trading stock sample
was drawn from the S&P SL 20 index as to test the variables at their ceiling liquidity. The results shows there were no
material impact from any of the variables studied on trading liquidity of sample stocks.
