ICARE 2016

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The Impact of Dividend Policy on Stock Price: An Empirical Evidence from Hotels and Travels Companies Listed in Colombo Stock Exchange
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Hettiarachchi, U.S.J.; Rajeshwaran, N.
Dividend Policy is one of the important factors that affect the stock price. Dividend policy is measured by dividend per share, dividend yield and dividend payout ratio. The purpose of this paper is to identify the impact of dividend policy on stock price in the hotels and travels sector companies listed in the Colombo Stock Exchange. Thirty-four companies listed in the hotels and travels sector were analyzed for a period of five years from the year 2012 to 2016. Data were collected from the annual reports of the companies. Statistical Package (SPSS 19.0) was applied to analyze and evaluate the collected data. Correlation analyses and multiple regression are used to explore the association between study variables. A positive impact is found between dividend per share, dividend presence in a firm with stock price changes, while a negative impact between dividend yield and stock price changes is also identified. The impact of dividend pay-out ratio deemed to be insignificant. In addition, it is shown that assets growth rate and firm size explain stock price changes. The study supports the fact that dividend policy is relevant in determining the stock price for the hotels and travels sector companies listed in the Colombo Stock Exchange.
The Impact of Ownership Structure and Ownership Concentration on Financial Performance of Companies Listed on Colombo Stock Exchange
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Rathnayake, A.R.M.B.I.; Weerathunga, P.R.
This study investigates the impact of Ownership Structure and Ownership Concentration on financial performance of Public Companies listed on Colombo Stock Exchange. For this purpose, a sample of 46 top capitalized companies as on 30th August 2016 were selected. Accounting based performance measures of Return on Assets and Return on Equity are used as proxies for financial performance. Ordinary Least Square (OLS) linear Regression model is employed to identify the association between dependent and independent variables. The results of the study reveals that Institutional Ownership, Individual Ownership and Foreign Ownership have not significant impact on financial performance. However, the Ownership Concentration ratios have significant impact on financial performance. All the Ownership Concentration ratios used in this study showed significant impact on the Return on Assets and Return on Equity except the percentage of shares held by first two largest shareholders. This study implies that the majority of the share ownership is held by first five largest shareholders. Therefore, the most of the Sri Lankan companies’ ownership are highly concentrated and it influences to the financial performance.
Assessing the Factors Influencing Profitability of Listed Hotels in Sri Lanka
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Begam, A.M.R.
The purpose of this paper was to investigate the factors influencing profitability of listed hotels in Sri Lanka. This study is significant for the developing country like Sri Lanka as a prominent tourist attraction in south Asian region. Sri Lankan government has identified the Tourism sector as a key growth area in the post-conflict development era, with a target of attracting 2.5 million visitors by 2016. Tourism arrival has increased by 160 % since 2009, as the number of arrival was recorded in 2013 was 1.3 mn compared to 0.5 mn in 2009. However, JLL (2016) report reveals that the Average profit per room (Rev per AR) of the hotel industry was showing a decreasing trend. Hence, the objective of the research is to identify the factors influencing the profitability of listed hotels in Sri Lanka. Findings of this research would be useful for the hoteliers to identify the factors influencing the profitability of the firm. Hoteliers can follow the recommended practices to increase the profitability in the hotels. This research was based on secondary data. Secondary data collection focuses on extracts of financial statements of randomly selected 26 listed hotels for last 3 years, i.e. from 2012 to 2015. Financial ratios and financial variables were used to test applicability of independent variables and hypotheses on dependent variables. This study was tested the degree of influence of the independent variables of operational efficiency, investment in training and development of associates, hotel size, investment in research and development and amount of interest bearing loans on the dependent variable of Profitability of listed hotels. Operational efficiency and amount of interest bearing loans were identified as significant variables of influencing the profitability of the listed hotels.
Data Deluge and Its Analysis Issues
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Wijayatunga, P.
Current availability of enormous amount of data is mainly due to technological advances. They are useful drawing inferences for creating new businesses, formulation of new policies or revising existing ones, etc. However, much of analyses are performed either by subject domain experts implementing mathematical and computational models incorrectly or by mathematical and computational professionals, purely on data driven basis without paying required attention to the subject domain knowledge. Both of these exercises often result in incorrect inferences and therefore they may harm the society, especially when their inferences are used in practice. We argue that, in order to get valid inferences these two parties should work together. Here we briefly discuss some of the issues that the large-scale data analyses should take into account, especially in open data and big data. We also briefly discuss our solutions that are rather simple to implement.
Identify the Market Efficiency of Assets Write down Announcement - A Study on Loss Earned Listed Manufacturing Companies in CSE
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Sooriyakumaran, L.
This research paper examines the market efficiency of loss earned listed manufacturing companies to assets write down announcement and test whether there was semi-strong form of market efficiency available in Colombo Stock Exchange (CSE) under the circumstances. This study attempts to answer the research question of are the loss making companies’ impairment of non- current assets announcements impact to share market? This issue is examined using an overall sample of 62 events relating to 22 listed manufacturing companies covering the period from January 2007 to December 2014. From the events, 12 events were considered to analyse the loss earned 10 listed manufacturing companies market efficiency. The standard Event Study Methodology (ESM) is adopted in order to carry out the study. This study finds that assets write down announcement impact on share prices of loss earned listed manufacturing companies at the level of 01% on the event date. It reveals that CSE has supported to the semi strong form market efficiency which is run on publicly available information on CSE.
Contemporary Political Issues Responsible for Poor Local Governance in Nigeria
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Baba, I.
This research examined contemporary political issues responsible for poor local governance in Nigeria. It assessed how these issues alternative solution to these issues can be achieved. The quantitative research methodology was adopted in conducting the research. Lack of autonomy which local government councils in Nigeria are suffering from is discovered as one of the contemporary political issues responsible for poor local governance in the country. Independent local government system as this research recommended is one of the possible alternatives to addressing the problem of poor local governance in Nigeria.
The Impact of Corporate Governance on Firms’ Dividend Policy: Evidence from the Listed S&P SL20 Companies in the Colombo Stock Exchange
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Ekanayake, H.L.; Paranthaman, T.
The concept of corporate governance is one of the issues that have attracted the attention of researchers and organization around the world. Corporate governance is measured by board size, ownership structure, board independence and CEO duality. The purpose of this study is to identify the impact of corporate governance on firms’ dividend policy for the listed S&P SL20 companies in the Colombo Stock Exchange. Twenty listed S&P SL20 companies were analyzed for a period of six years from 2010 to 2015. Data is collected from the annual reports of the companies. Statistical Package for Social Science (SPSS 19.0) is used to analyze and evaluate the collected data. Univariate, Multiple regression and correlation analyses are used to explore the association between board size, ownership structure, board independence and CEO duality and firm dividend policy. A positive impact is found between CEO duality and firm dividend policy and negative impact is found between ownership structure and firm dividend policy. The impact of board size and board independence deemed to be insignificant. In addition, it is shown that firm size and profitability explain firm dividend policy. The paper supports the fact that corporate governance is relevant in determining the dividend policy for listed S&P SL20 companies in the Colombo Stock Exchange.
Financial Performance of SBI Mutual Funds: An Analysis
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Baral, S.K.
When we talk about mutual funds, putting all our eggs in a single basket is never a wise decision. This is due to the market volatility and the risks involved in it. But one can minimize risk by distributing his investments among various financial instruments, industries and many more options. Here the intent is to maximize returns by investing in diversified areas, where each would react differently to the same event. This not only buffers the impact of a market downturn, but also allows for more potential rewards by offering a broader exposure to various stocks and sectors. A mutual fund is a pool of money from various investors who wish to save or make money. Investing in a mutual fund can be easier than buying and selling individual stocks and bonds on our own. Investors can sell their shares when they want. The main objective of this paper is to analyze the financial performance of State Bank of India (SBI) mutual funds.
Relationship between Stock Market Performance & Economic Growth: Empirical Evidence from Sri Lanka
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Silva, N.K.L.; Perera, P.R.M.R.; Silva, N.L.C.
In general, economic growth is an important factor which helps a country to become strong and prosper than the other nations in the world. Thus the attempt of this study is to identify the relationship between stock market performance and economic growth of Sri Lanka and to analyze how stock market performance affect to the economic growth of Sri Lanka. Quarterly data is collected from Central Bank of Sri Lanka, Department of Census and Statistics of Sri Lanka, and Colombo Stock Exchange for a period of sixteen years from year 2000 to 2015 to follow the analysis where All Share Price Index representing the Stock Market Performance is the independent variable while Real Gross Domestic Product representing the Economic Growth is the dependent variable. Data set is proven to be normally distributed. Econometric technique of simple regression model and correlation analysis were used to analyze the data using SPSS software in order to identify and further explain the relationship between stock market performance and economic growth of Sri Lanka. Findings of the study is parallel with the previous literature that discloses a strong positive relationship between stock market performance and economic growth of Sri Lanka. This study lengthens the literature, providing valued information to economists in developing countries and to the academia.
The Strategic Perspectives of Market for Accountants: A Case of Sri Lanka
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Dabare, G.C.P.
This research study is about the strategic perspective of market for Accountants in Sri Lanka. Sri Lankan Accounting education is consist with both academic and professional education. In Academic education sector for both Government and foreign universities student registration is higher in field of Accounting. Today most of the foreign Accounting education providers are partnering and providing Accounting qualifications for Sri Lankan market. This research is focusing to identified the strategic perspective of market for Accountants. This research is addressing on areas of reason behind why students are more preferred to select Accounting subject than other management subjects in Sri Lanka, what is the reason Engineering and other students are obtaining Accounting qualification in addition to their main career qualification, Level and current demand for Accounting Professional and Academic education in Sri Lanka, Identifying the Industry players offering Accounting education for the Sri Lankan market, what is their history, Nature of the business, current demand, target customer group, current and future strategies for Sri Lankan market, Identifying the most appropriate strategy for market for Accountants in Sri Lanka.
Investors Perception and Performance of Credit Rating Agencies in India
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Vasan, M.; Yoganandan, G.
Credit ratings agencies play an important role in the development of capital market in India. It protects the interest of investors by forewarning the risks associated with the capital market instruments. In this backdrop, the present study vigilantly analyses the investors’ perception and performance of credit rating agencies. This study is conducted through a survey method among 400 investors. The study found that majority of the investors relatively new to the credit rating based investments and brokers are the major source of information for them. The study also has identified four predominant factors of perception of investors towards credit rating agencies as rudimentary perception on credit ratings, knowledge on rating agencies, knowledge on rating mechanism and knowledge on utility of ratings by using factor analysis. The study also identified factors influencing the performance of credit rating agencies as information attainment, investment decision making, and trustworthiness, forewarning risk and service quality.
Virtual Learning Environments: Transitioning Student Performance in Accounting at Higher Education Institutes in Sri Lanka
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Warusavitarana, P.A.; Dona, K.L.; Epitawela, D.D.
This paper discusses how Virtual Learning Environments influence the student performance in Sri Lankan Higher Education Institutes. The technology has made drastic changes in the education sector. Many Higher Education Institutions have shifted from traditional teaching to innovative, student centered teaching and learning methods. Virtual Learning Environments, facilitate learners and the teachers to collaborate and co-create an engaging learning space to develop knowledge and skills. The pilot project explored whether the use of different learning technologies to provide access to online resources and quizzes could improve classroom participation, student engagement, and students performance. This paper presents the insights of the course development, delivery and results from the project, highlighting that the use of learning technologies have increased the learner engagement in the subject content leading to increased student performance in the semester examination across two years.
Rules of the Monetary Game
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Lekshmi, P.; Ganesh, C.
Aggressive monetary policy actions by one country can lead to significant adverse cross-border spill overs on others, especially as countries contend with the zero lower bound. If countries do not internalize these spill overs, they may undertake policies that are collectively suboptimal. Perhaps instead, countries could agree to guidelines for responsible behaviour that would improve collective outcomes. This paper puts forward some of the practical issues that need to be considered in framing possible rules of the monetary game. It is argued that policies could be broadly characterized and rated based on analytical inputs and discussion. Policies that generally have positive or domestic effects could be rated Green, policies that should be used temporarily and with care could be rated Orange, and policies that should be avoided at all times could be rated Red. The study provides a brief review of the some of the frameworks that have been used in the literature to measure and analyze spill overs. The study make the case that models may reflect the policy biases of those devising them, and may be at too early a stage to be able to draw strong conclusions from them. Therefore, while more empirical analysis should be undertaken, it should be seen as an input to a dialogue rather than definitive, with the analysis being refined as to understand outcomes better. The paper also discusses the specific role of the IMF in this context.
The Impact of Working Capital Management on Corporate Profitability: Evidence from Listed Manufacturing Company of the Colombo Stock Exchange in Sri Lanka
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Elangkumaran, P.; Nimalathasan, B.
Efficient management of working capital ensures a company has sufficient cash flow to meet its short-term debt obligations and operating expenses. The study analysis WCM and corporate profitability of listed manufacturing companies of the CSE in Sri Lanka. A sample of twenty-two listed manufacturing companies selected randomly for the purpose of this study. Data collected from annual reports of the sampled firms for the period 2009- 2015. The working capital was determined by the cash conversion cycle and the profitability was measured by return on assets. The study applied panel data models (random effects). The data were analyzed by means of descriptive statistics and GLS random regression analysis using STATA 12. The study finds that there is a significant negative impact of inventory turnover on corporate profitability while debtors turnover insignificant positive affect corporate profitability. In addition, creditors’ turnover has significant positive impact on corporate profitability. The results conclude that WCM impact of profitability of listed manufacturing companies in Sri Lanka
Impact of Technological Innovation on Growth of the Small Enterprises: A Study of Coir Industry in Sri Lanka
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Fernando, W.M.S.N.; Dasanayaka, S.W.S.B.
The prime aim of this research study is to identify the impact of Technological Innovation (Technopreneurship) on the Small Enterprises (SEs) Growth. The study primarily contemplates on four types of Technological Innovation based on Machine Technology, Computerized Operations, Mobile Technologies and Other Communication Media Technologies of Coir SEs in Puttalam district of Sri Lanka. Primary data is collected from a sample of 100 which is drawn from the total population of 133 Coir SEs through the application of Simple Random sampling. An Ordered Logistic regression analysis is used as per the Inferential (Multivariate) Statistical analysis. Results depict, the growth of these four types of technologies based Innovation (Technopreneurship) lead for Enterprise Growth. Moreover explains that higher (up to date) the extents of these technologies, higher the positive contribution for Technological Innovation performance. Inadequate finance, lack of the knowledge are identified as the main reasons for the lower orientation of Coir SEs on Technology based Innovation performance. To promote technology based more value addition Coir SEs in Sri Lanka, emphasis on ‘Technopreneurship’ is essential where there is a requirement of Coir Industry and SEs category aspects specific Business Incubator (BI) model in Sri Lanka.
A Study on Impact of Acquisition Announcements on Financial Performance of Selected Hospitals in India
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Nishant, R.V.
Mergers and acquisitions is one of the most effective ways to expedite the implementation of a plan to grow rapidly today. This study examines performance, growth and profitability impact of the healthcare sector after mergers and acquisitions as Indian healthcare sector is emerging as one of the fast-growing service sectors in India. Among the healthcare sector in India, five hospitals have been considered and the data were collected from Centre for Monitoring Indian Economy (CMIE). The study reveals that the leverage, liquidity, activity and profitability have improved after acquisition but there is no greater change in total expenditure. So, the hospitals could concentrate on reducing the total expenditure.
The Impact of Techno Incubators in Growth of Techno-based Small and Medium Enterprises (SMEs) in Sri Lanka
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Jayakody, J.A.N.S.; Dasanayaka, S.W.S.B.
The main objective of this research is to study the impact of the technoincubators to promote techno-based Small and Medium Scale Enterprises (SMEs) in Sri Lanka. Literature survey shows that proper incubator process and techno-SME startup eco-system can reduce the mortality of the techno- SME startups. The main methodology of this research is primary data collection through sample survey of seventy one techno-SME entrepreneurs supplemented by interviews with key stake holders. The results show that lack of strong techno-SME promoting national eco-system, inconsistencies in selection process for the techno-incubator facilities, the services offered and the business support given by the techno-incubators are not in-line with incubatee’ s current requirements. In general, incubator authorities need more focus on business support services and appropriate skills development for techno businesses.
Corporate Strategies, Strategic Options and Integration: Empirical Study on Emirates Airline
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Shanjeevan, B.; Divassini, P.
The airline industry is considered rather unattractive, particularly due to the fact that the large threat of buyers and the rigorous competition within the industry. The purpose of the study is to pinpoint the possible corporate strategies, strategic options and integration of Airline industry. This study was conducted by examining ten Emirates Airlines carrying the most passengers on international flights plus Qatar Airways, Etihad Airways and Singapore Airlines. As the outcome of the study, it was found that Emirates locked itself into a growth strategy and struggled to expand the potential market share in order to survive in industry. Hence, Emirates was established itself over sustainable competitive advantage with the use of its Dubai mega-hub by limiting the growth potential, since it suffered from congestion and improbable attractive markets in the airline industry.
The Relationship between Short-term Interest Rate and Stock Market Performance: Evidence from Sri Lanka
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Weerakoon W.P.P.K.; Jameel A.L.M.
The issue on the relationship between stock market performance and the interest rate has been discussed by economist and researchers since both play important roles in influencing one nation’s economic development. The aim of this paper is to examine the relationship between short-term interest rate and stock market performance for Sri Lankan stock market using the data from July 2005 to June 2015. We used three-month Treasury bill rate as the proxy for the short-term interest rate and All Share Price Index (ASPI) as the proxy for the stock market performance. In addition to the short-term interest rate, the regression model consists of other three important macroeconomic variables such as money supply, consumer price index and exchange rate in order to extract the effect of monetary policy, country’s price level and foreign exchange rate on the stock market performance. The Multiple regression results in displays that the relationship between short-term interest rate and stock market performance exist as significantly negative. Further, the study found that the exchange rate and inflation rate have negative and money supply has a positive relationship with ASPI. The findings of the study hold practical implications for policy makers, stock market regulators, investors, and stock market analysts.
Impact of Dividend Policy on Market Share Price, Evidence from Financial Industries in Sri Lanka
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Uthayakumar, R.; Mujahith, M.U.M.
This study examines the impact of dividend policy indicators, dividend payout ratio and dividend yield, on the market price of a share of the companies operating in the banking, financing, insurance, and leasing industries in Sri Lanka. The study was carried out using 5 year data from 2010 to 2014 obtained from the annual reports of sample of 20 listed companies in the financial sector. From the data analysis, it is found that the dividend payouts ratios have weakly and positively correlated with share price indices, and dividend yields have weakly and negatively associated. The dividend payout ratio and dividend yield have an insignificant impact on the market price of shares of the companies in the industries. Hence, it is concluded that the dividend policy has no significant influence on determining the market value of shares of companies in the banking, financing, insurance, and leasing industries in Sri Lanka.