ARS - 2006

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    An investigation of dividend policy behavior and information content of dividends in selected countries
    (University of Kelaniya, 2006) Peter, P.L.S.; Bamunuarachchi, G.K.
    Any company that essentially exists with the objective of maximizing the wealth of its shareholders is faced with the choice of either paying dividends now or reinvest now to pay later. This choice forms the background for the dividend policy decision that defines the time pattern of dividend payout. Numerous theoretical and empirical publications have kept dividend policy in its prominent status in corporate finance literature. Studies on dividend policy have been applied on companies listed in stock markets of both developed and developing countries. Employing meta-analysis that combines the results of several studies conducted on capital markets of a selected sample of countries, this paper analyses the dividend policy behavior of countries around the world in terms of dividend policy stability and the information content of dividend announcements. The paper concludes that the state of development of the country does have an impact on the dividend policy stability as companies in more matured markets in developed countries tend to maintain dividend stability although companies in emerging markets of developing countries have been unable to do so. On the other hand with respect to information content of dividend announcements it is evident that dividends have significant information content in all share markets and that on average all markets react negatively to surprise decreases in dividends which is more than proportionate to the positive reaction to surprise increases in dividends. Further it can be concluded that emerging markets take considerable time to fully incorporate information contained in dividend announcements while in mature markets it is less so. Mature markets tend to be more inline with the market efficiency hypothesis with respect to dividend announcements. As future research an investigation of dividend policy behavior and information content of dividends in a Sri Lankan context is to be conducted.
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    Impact of Banking Commissions on Sri Lankan Banking System
    (University of Kelaniya, 2006) Kumari, J.A.P.
    The transition from traditional feudal economy to a modern export - Import economy during the 1830s necessitated a modern banking sector in Sri Lanka. From the 1830s to 2005 Sri Lankan has experienced many changes in its banking sector and finally the country was able to cater to its economy with a well developed financial system. The objective of this paper is to analyses the role played by various government investigation commissions in bringing these development in the banking sector. From time to time Sri Lanka has appointed commissions to make recommendation about a particular section of the banking system or banking sector as a whole. Activities of three commissions appointed by the government, Pochkanawala Commission (1934), Exter Commission (1948) and the Presidential Commission on Finance and Banking (1992) formed the basis of this study Reports of the commissions, other related documents, historical records and parliamentary legislations were analyzed in order to evaluate the probable impact of the recommendations of these commissions. Findings of the study: 1.Bank of Ceylon and Agricultural and Industrial Credit Corporation were established on the recommendation of the First Banking Commission. 2. Central Bank of Sri Lanka was established based on the recommendations of the Exter Commission. 3. Recommendation of the Presidential Commission on Finance and Banking helped Sri Lanka to restructure Central Bank, other financial institutions, insurance industry, capital market and debt recovery legislations of Sri Lanka. 4. Some of the very important recommendations made by these commissions were not implemented 5. Reports of these commission provide an in depth analysis of the banking system of relevant periods.
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    The Study of the potentials of Folk-Media performance as a form of effective communication in community mobilization
    (University of Kelaniya, 2006) Jinadasa, W.W.M.P.K.
    The major function of the community development programme is to build up awareness and empower the community in order to achieve the objective. So far the most common methodology has been discussion, dialogue and lecture programme with the system of small-group communication. This type of communication is known as Praja Sabha, Sanwardhana Sabha, Grammiya Sabha…. Within development programmes. The historical origin of this system is also interesting. In the past in Sri Lanka we hear of the systematic use of Wel Sabha, Wariga Sabha,Wau Sabha… as a method of small group communication.This method has been in use in Sri Lanka over long period of time and today it seems appropriate that we should move in to a more effective alternative media of communication. It seems appropriate that we make use of features of Performance Arts which are available in the Traditional Folk- Media such as Vocalization, Instrumentalization, Dancing, and Dramatization which are prevalent in rituals and folk-lore. Development messages can be communicated effectively through the use of Kavikolaya, Adaberaya (Drumming), ritual forms of chanting, Panchaturya Vadanaya, Mask dancing and Devil Dancing. This type of presentation is more attractive as well as emotionally touches the audience. It also embodies variety of Rasa such as humor, Heroism, Erotic and Fantasy and variety of feelings. A broad change can be effected by the activization of Performance Arts in case of mobilization programmes. This could be made use of as a new methodology and a systematic approach in community participation. Such programmes can be organized with the participation of Traditional Folk-artists as well as enthusiastic youth of the areas. This pilot test was done covering 28 villages in the Rasnayakapura Divisional Secretary area. It was tested on 24 instances by Intermediate Technology Development Group (I.T.D.G)in the Community Governance Programme as a tool of Community Mobilization from 31st July 2004 to 1st July 2005.
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    Does the Colombo Stock Exchange Overreact?
    (University of Kelaniya, 2006) Pathirawasam, C.
    The efficient markets hypothesis has been the central theme in finance for nearly 35 years. Fama (1970) defined an efficient financial market as one in which security prices fully reflect the available information. However behavioralists such as Daniel, Hirshleifer and Subrahmayam (1998) Barberies, shleifer and Visny (1998), argue that financial markets are not efficient due to two investor biases These are over reaction and under reaction. De Bondt and Thaler (1985) have written several papers in which they argue that investors over react New York Stock Exchange. Particularly they find that stocks that are the most extreme losers in the past 3 – 5 year period have abnormally high returns in the subsequent 3 – 5 year period and vice versa. Hence they argue that investors over react for the extremely good news and extremely bad news. Objective of this study is to test whether the long term overreaction hypothesis is predictive in the Colombo Stock Exchange. This study uses monthly return data of common stocks for Colombo Stock Exchange for the period between January 1993 to December 2005. De Bondt and Thaler define the over reaction hypothesis as (~ | ) 0 1 < Wt t− E u F and (~ | ) 0 1 > Lt t− E u F . The first term explains that residual returns of high returns portfolio formed conditional upon the information set at t-1 are negative and the second term explains that residual returns of low returns portfolio formed conditional upon the information set at t-1 are positive. In this study t period has been taken as 24 months and 36 months. The residuals are estimated as it jt mt U~ = R − R . There is no risk adjustment except for movement of the market as a whole and the adjustment is identical for all the stocks. For every stock j cumulative excess returns (CUj) are computed for the prior 36 months and formed in to 5 portfolios. The highest CU portfolio is named as the Winner and the lowest CU portfolio as Loser. Then, for both Winner and Loser next 36 months Cumulative Abnormal Returns (CAR) are computed. If a security’s return is missing more than 80% of the months with in a period that security is removed from the portfolio and the CARs in order to handle the thin trading problem. Findings of the study shows that past period losers are mostly generating positive returns in the subsequent 36 months and only 10 months show significant returns. However prior period winners reflect on average positive returns also in the next period and all of these returns are statistically significant after the 25th month. Therefore it can be concluded that there is no long term over reaction to new information at the Colombo Stock Exchange.
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    An Empirical Study on Day of the Week Effect; Evidence from Colombo Stock Exchange
    (University of Kelaniya, 2006) Fernando, P.N.D.; Pathirawasam, C.
    Seasonalities in security market returns have been extensively documented. Among the different seasonal effects observed in stock markets, an interesting one is the seasonality across days of the week. Fields (1991) observed that the US stock market consistently experienced significant negative and positive returns on Mondays and Fridays respectively. This matter was further tested in 1980’s (French, 1980; Gibbons and Hess 1981, Lakonishok and Levi 1982). The capital markets of many other countries also experience the similar seasonality (Jaffe and Westerfield 1985, peiro 1994, Agarwal and Tando 1994). This day of the week effect is a sharp contrast to the efficient market hypothesis. This study examines the day of the week effect in the Colombo Stock Exchange using the All Share Price Index (ASPI) and the Milanka Price Index (MPI). The study covers the period from 1985 to 2004. We compute the returns of the above market indexes as daily price relatives and log returns are taken for the study. To estimate day of the week effect in return, we use the ordinary least square (OLS) equation. In the equation index returns are taken as the dependent variable and five dummy variables are inserted as independent variables from Monday to Friday. We estimate the day of the week effect for the total sample period and revealed that there is no any significant day of the week effect in the total period. Then we analyzed the day of the week effect in five year sub samples and results are similar to the total sample period except in the last sub sample that is from 2000 to 2004. In the last sub sample there is a statistically significant Friday effect and for other days, returns are not significant.
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    Identification of Critical Success Factors for Large Scale Information Systems Implementation in Sri Lanka
    (University of Kelaniya, 2006) Wijayanayake, W.M.J.I.; Vithanage, D.K.A.
    Information is so crucial for the today’s business organizations existence. Most of them are moving towards the concept of digital firm or information centric business. Information therefore has become an important asset thus managing them in a proper way is considered as a high priority. Information systems (IS) have emerged to fulfill the need of them. Large businesses have very complex information requirements thus require complex IS namely “large scale IS”. During the last few decades many companies acquire large scale IS to gain competitive advantage. But the failure rate of enterprise systems as studied by the researchers were almost 70% and most of this IS failures resulted from poor implementation mechanisms adopted by the implementers. However, there has been not much research done to identify the factors that affect the implementation failures of large scale information systems in Sri Lanka. Therefore, it is worth studying and identifying the factors that affect the successful implementation of large scale IS in Sri Lanka. This paper focuses on developing and testing a model for successful large scale IS implementation by identifying critical success factors. A pilot survey was conducted initially to identify the critical factors for implementation success. For this, well reputed local and multinational companies’ top IT executives were surveyed. The analysis of gathered data reveals that the factors affecting the implementation of large scale IS can be distinctly categories in to six perspectives namely Individual, Task, Technology, Structure, Process & Environmental factors. Further analysis on data shows that these factors can again be overlook in two dimensions, factors affecting the pre-implementation stage and implementation stage. These six distinct categories were put in to four phases according to there priority of consideration. This research is only a beginning of a research effort that ultimately aimed to derive a framework for implementing large scale IS in business organizations in Sri Lanka.
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    A Visual Management System for Universities - A CASE STUDY OF THE UNIVERSITY OF KELANIYA, SRI LANKA
    (University of Kelaniya, 2006) Sirisena, H.; Hewawitanagamage, U.R.; Munasinghe, J.; Sakalasooriya, N.; Kalansooriya, J.
    Expansion of the boundaries of human knowledge is the key to enhance the quality of civilizations. Knowledge results in systems. Systems, in turn, make better environments where human beings could maintain high standards of life. We all are aware of the famous saying of Munidasa Kumarathunga, the renowned Grammarian of Sinhala language and patriotic, which states that "A nation cannot achieve success unless new discoveries are made." (alut alut de notanana jaatiya lova nonagi). When we were students we had to face lots of difficulties within the university premises, due to lack of a proper system of visual management. When we became members of the staff as academics and administrative officers we faced more difficulties in regard to above mentioned matter. We experienced this problem specially, when a new batch of students enters the university. Also, in the recent past various fee levying Postgraduate and Diploma courses have been introduced by our faculties and thousands of external students have been registered for undergraduate degrees at CODL. As such, we are in need of a systematic way to handle this mass who interacts with our various academic and administrative departments/branches in the University. When we undertook our Postgraduate Degrees in various foreign countries such as India, Russia, Germany and United Kingdom etc., we have been inspired by the visual management systems displayed by their universities. Certainly they are applying their knowledge to the betterment of their own society. These thoughts inspired us and as a result we have made an attempt to introduce a visual management system for our university. We hope that this kind of visual management system can be applied to any university.
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    Archaeological Heritage in Biyagama Division
    (University of Kelaniya, 2006) Gunawardhana, P.; Namalgamuwa, H.; Bandara, N.; Wijesuriya, D.; Saldin, M.; Mahoney, T.
    Archaeological heritage of the Kelaniya region goes back to the Proto-historic times. The transitional phase from the Mesolithic culture of the Pre-historic period to the Protohistoric or Early Iron Age is revealed in the region. The Proto-historic period in Sri Lanka is believed to be in 1000 BC (Senaviratne, 1985). The black and red ware found from the Pilapitiya, draws our attention to the fact that the Kelani valley region has played a key role during this period. According to the chronicles, Kelaniya had been an organized city and remained a remarkable strategic point from the 3 rd century BC. As ancient Sri Lanka was strategically located on the trade routes between south –East Asia and west Asia, it is suggested that Kalyani or Kalyani pattanam might have functioned as a main sea port of the city where many traders lived and engaged in the international trade. However, due to the rapid development of the socio-economic sector in the country, it tended to change the cultural landscape and also the contemporary appearance of the buildings, monuments and sites. For the investigation of this region as an initial stage, we used the unsystematic survey method which has identified about one hundred thirty seven archaeological heritage sites (Gunawardhana, 2006). The aim of this paper is to discuss the archaeological heritage of Biyagama division and will finish addressing the concepts of archaeological heritage of this environment.
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    Morphometric differences observed between two populations of Clarias brachysoma, an endemic, edible freshwater fish of Sri Lanka
    (University of Kelaniya, 2006) Gunawardane, N.D.P.; Hettiarachchi, M.
    Clarias brachysoma is an endemic, edible, freshwater fish found in Sri Lanka. Several species of Clarias in other parts of the world are considered as suitable candidates for aquaculture. Clarias brachysoma also is a popular edible fish, however, it is not cultured in Sri Lanka mainly due to unavailability of seed for stocking. In trying to develop a breeding programme for Clarias brachysoma, preliminary studies were carried out to find out the size at maturity in order to select a suitable broodstock. Here, some significant morphometric differences were observed in samples of Clarias brachysoma collected from two river basins of Sri Lanka. Samples of fish were obtained from Madu Ganga River Basin (Balapitiya) and Dadugam Oya River Basin (JaEla) in December 2005 to July 2006 and were maintained separately. Each fish in each sample was euthansiated following the standard procedure. Before observing the gonads for maturity, morphometric and meristic characteristics such as length measurements of the body parts and ray counts of fins were recorded for each individual. All the data from two sets of fish samples were tested for normality and then were compared using two sample T-Test and Principle Component Analysis (PCA). Significant differences of the measurements of body weight, total length, standard length, width of the body, length of the caudal fin, head measurements such as pre-dorsal length, head shield length, length of barbles and height of the body were observed for the two samples (P< 0.05). Significant differences were not recorded for meristic data (P> 0.05). However the clear separations were obtained from the PCA score plot of the first two principal component axes. Calculated length weight relationships were also different from each other for the two sets of samples. In the present analysis of morphometric data it clearly indicated that there were significant morphological differences in the two sets of samples of Clarias brachysoma collected from Madu Ganga River Basin and Dadugam Oya River Basin. It would be interesting to carry out DNA analysis to see whether the morphological differences are due to heritable dissimilarities.
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    Adopting e-commerce based technologies in SMEs of developing countries
    (University of Kelaniya, 2006) Wickramarachchi, R.; Pathirana, B.S.V.
    Adopting e-commerce technologies would promise several benefits to small and medium scale enterprises (SMEs) such as, access to wider range of markets, greater potential for partnerships and low cost etc. Also the competition in the global market and advances in Information Technology have made SMEs, not adopting e-commerce based technologies vulnerable to e-enabled firms. The benefits of using e-commerce may differ from country to country due to cultural differences and other factors such as per-capita income, computer literacy etc. Ease of use, relative advantage gained by e-enabled firms over the others, compatibility, and demonstrability of the results are viewed in different perspectives by developed and developing countries. Level of socio economic development would decide on the extent to which the firms are influenced by and usage of e-commerce. The objective of this article is to present the factors that influence the decisions of adopting e-commerce for SMEs, and develop a model for developing countries. A literature review was conducted using 40 research papers and model was developed by identifying widely cited factors. This model suggests 3 main influencing factors, namely: characteristics of the e-commerce solution, characteristics of the organization and characteristics of the external environment. As this is part of an on going research at department of Industrial Management, University of Kelaniya, it is expected to modify and validate the model identified in the Sri Lankan context.