Browsing by Author "Chandrasena, S.M."

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Bank-Specific Determinants of Risk Management Efficiency: Evidence from Listed Commercial Banks in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, 2015) Piyananda, S.D.P.; Chandrasena, S.M.; Fernando, J.M.R
This study aims to identify the significant bank specific determinants of risk management efficiency of the listed commercial banks in Sri Lanka, by covering the financial statements of 11 banks during the period of 2008 to 2014. Panel regression analysis employed as the data analysis tool. Capital Adequacy Ratio (CAR) has been used as the dependent variable as the proxy for risk management efficiency and credit risk, liquidity risk, market risk, return on assets (ROA), banks’ size, and operational efficiency selected as the determinants of bank efficiency. Results revealed that the credit risk, liquidity risk, ROA, operational efficiency and banks’ size are the important factors of determining the degree of CAR of commercial banks in Sri Lanka. Further as shown by the results of the study, independent variables collectively have high effect on the dependent variable since the explanatory power of the model is approximately 67%.
A Case Study Review of Strategic Acquisitions of Synergic PLC
(Staff Development Unit, Faculty of Commerce & Management Studies, University of Kelaniya, 2015) Morawakage, P.S.; Kulathunga, K.M.K.N.S.; Basnayake, W.B.M.D.; Wijesinghe, M.R.P.; Chandrasena, S.M.; Piyananda, S.D.P.
Synergic Holding PLC initiated operations in 1991 as a software development company. It was incorporated as a private limited company in 1998 and obtained a listing in the Colombo Stock Exchange in June 2011. Soon after the incorporation they became the sole authorized distributor for DELL Computers in Sri Lanka. Gerrys Synergic (Pvt) Ltd started as a joint venture with Gerrys Holdings (Pvt) Ltd in Pakistan, fulfilling Mr. Alok Pathirathne’s (the founder of Synergic Holdings PLC) dream of ‘going global’. Synergic Company’s move towards furniture retail, from IT related activities was the first instance they adopted the diversification strategy. At present the Synergic Holding PLC is rated as one of Sri Lanka’s most energetic and aggressive conglomerates. The diversified key sectors are Information and Communication Technology, Healthcare, Retail, Financial Services, Automobiles and Leisure. This case study specifically underlines the strategic acquisition of Rovel PLC which took place in the year 2014. Rovel PLC initiated its operations in 1989, in a small retail outlet. Today, Rovel’s flagship department store is a 36,000 square foot, lavishly appointed store and it owns 20 other outlets in many strategically important locations. Rovel operates at the top end of the retail fashion market, where it has carved out a niche through a highly focused approach targeted at the upper-middle and higher-income groups, Rovel has maintained its leadership position by providing a modern, world-class retail environment that has become the standard for the South Asian region. Rovel is not only Sri Lanka’s leading fashion brand, but with a wide array of products, it is also Sri Lanka’s only genuine department store. Rovel has achieved the status of an iconic brand with its tireless ability to reinvent itself at regular intervals. The recent acquisition of Rovel PLC by Synergic Holdings has created a major upheaval amongst the business community and the media. One main intention behind the said acquisition was Synergic’s motive of working with Parkson, the largest shareholder of Rovel. However the withdrawal of Parkson from Rovel PLC left Synergic’s efforts futile. Also after the said acquisition, Synergic’s excessive borrowings have resulted with its Fitch Rating being downgraded by two notches. The boards of directors now are contemplating about the survival of the company with its existing structure.
An Empirical Analysis of Liquidity in S&P SL 20 Index of Colombo Stock Exchange
(University of Kelaniya, 2014) Fernando, C.S.P.K.; Chandrasena, S.M.; Perera, H.A.N.D.
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.
An Empirical Study on Corporate Ownership Structure and Firm Performance: Evidence from Listed Companies in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, 2015) Chandrasena, S.M.; Kulathunga, K.M.K.N.S.
Ownership structure, whether it is concentrated or dispersed, is one of the main determinants of organizational performance. Theories of corporate governance insist on dispersed ownership and segregation of ownership and management. In most of the emerging countries a concentrated form of ownership is evident in listed companies. Therefore the objectives of this study are twofold; to investigate whether ownership structure has an impact on firm performance and to examine whether concentrated ownership has an impact on firm performance, in companies listed in Sri Lanka. Researchers have considered a sample of seventy six (76) non-financial listed companies in CSE during the period of 2008 to 2014. A time fixed effect model is applied into the panel regression analysis and a Generalized Least Squares (GLS) regression model is chosen. Findings suggest that a significant relationship exists between ownership structure and firm performance. Empirical evidence further elucidates that institutional ownership has a significant positive relationship with firm performance, which can be justified based on the ‘active monitoring argument’. Significant negative relationship between individual ownership and firm performance can be argued based on ‘manager discouragement argument’. Concentrated ownership too has a significant positive relationship with firm performance, supporting the wellknown agency theory propositions.
Macro-Economic and Internal Determinants of Share Prices in Sri Lanka A Case from Colombo Stock Exchange- Banking Sector
(University of Kelaniya, 2014) Chandrasena, S.M.; Fernando, C.S.P.K.; Ranaweera, R.M.C.S.
The focus of this study is to identify the relationship between internal and macro-economic determinants on share prices in Sri Lankan based banking companies in the Colombo Stock Exchange (CSE). The study uses panel data pertaining to the banking sector over the period of seven years from 2006 to 2012. The fundamental purpose of this research is to ascertain the syndicate effect of profitability, dividend payout ratio, return on asset, Gross Domestic Production (GDP) and inflation (Independent variables) with share prices (Dependent variable). A sample of 7 listed banks has been selected from the CSE for the study. The basic objectives are to identify the relationship between share prices and selected independent variables and to capture the impact of unobserved data on share prices. Pool regression model and fixed effect model are employed to meet the objectives of the study. The results of the pool regression model show that profitability of the firm and GDP have a positive significant impact on market stock prices. By capturing the impact of unobserved data the entity fixed effect model reveals that certain banks had firm specific effects on share price. The time fixed effect model shows that favorable time periods cause to make favorable changes in share prices.
A Study on the Dividend Policy of Manufacturing Sector Companies Listed in the Colombo Stock Exchange, Sri Lanka
(Staff Development Center, University of Kelaniya, 2015) Chandrasena, S.M.
This research is carried out with the intention of identifying the determinants of the dividend payout ratio and the consistency of the same with regard to manufacturing sector companies listed in the Colombo Stock Exchange (CSE), Sri Lanka. A background study of 134 companies (45%) out of the total 295 companies listed in the CSE, which represented the Bank, Finance and Insurance Sector (71 companies), Beverage, Food and Tobacco Sector (23 companies) and Manufacturing Sector (40 companies) revealed that dividend policy in manufacturing sector has the lowest performance in terms of their dividend pay out ratio when compared with the other two sectors. Hence this paper is developed with the aim of understanding the underlying reasons for the poor performance of the dividend policy in companies representing the manufacturing sector, in CSE Sri Lanka. The objectives of the research is twofold. First objective is to identify the determinants of the dividend pay out ratio in manufacturing sector companies, with the intention of linking the reasons for poor performance to its determinants subsequently. Secondly the research expects to identify the consistency of the dividend pay out ratio of manufacturing sector companies as inconsistencies in the same imply a weak dividend policy and vice versa. 21 randomly selected companies listed in the CSE Sri Lanka, representing the manufacturing sector , for the 5 year period from 2009 to 2013 are used as the sample. In order to attain the first objective, a set of pre-determined independent variables are identified based on previous research, viz.profitability, operating cashflow per share, current ratio, market to book value, debt to equity ratio, firm size and net cashflow from investment activities. A linear multiple regression model is run and descriptive statistics are calculated for the variables of the model. The linear regression helps to find out the associations between the determinants and the dividend payout and the correlation coefficient assists to identify the direction of the relationship between independent variables and dividend pay-out ratio. In addition an adjusted coefficient of determination (adjusted R²) is calculated to test the overall effectiveness of the independent variables, in explaining the dividend pay-out ratio. To accomplish the second objective, which is to find out the consistency of the dividend pay out ratio skewness and kurtosis test is identified. The statistical analysis is performed using statistical software, viz. SPSS.