ICARE 2016

Permanent URI for this collectionhttp://repository.kln.ac.lk/handle/123456789/16375

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Subject: search.filters.subject.All Share Price Index

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    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.
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    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.