Volume: 3 Issue: 1 - 2023

Permanent URI for this collectionhttp://repository.kln.ac.lk/handle/123456789/29871

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Dynamics of Price and Volatility Spillovers among Stock Markets and Foreign Exchange Markets: Evidence from South Asia
(Department of Accountancy, University of Kelaniya, Sri Lanka., 2023) Samarakoon, S. M. R. K.; Rajapakse, R. P. C. R.
This study examines the volatility spillover interplay between the foreign exchange and equity markets in three key South Asian countries: India, Pakistan, and Sri Lanka. Drawing on time-series data from 2001 to 2023 and utilizing the DCC-GARCH model, distinct market dynamics emerge. India stands out with pronounced short-term and long-term bidirectional spillovers, revealing an integrated financial landscape. Conversely, Pakistan demonstrates heightened sensitivity to short-term market shocks with muted long-term correlations. Sri Lanka's financial landscape reveals an absence of short-term spillovers while manifesting pronounced long-term interdependencies. This study underscores South Asia's financial heterogeneity, offering pivotal insights for regional economic strategies, investment paradigms, and future academic studies.
Factors Affecting Share Prices of Finance Companies in Sri Lanka
(Department of Accountancy, University of Kelaniya, Sri Lanka., 2023) Pandigamage, N. G.; Ranaweera, D. C. P.
The price of a share is influenced by a variety of internal and external factors. Internal factors are those dependent on the company, such as return on equity, and earnings per share. The external influences include raw material pricing, economic trends, inflation, investor confidence, interest rate, exchange rate, and other factors that are beyond the firm's control. Both kind of factors may influence the investor’s future expectations and risk-taking ability, and as a result that they take their investment decisions. This study aimed to examine the factors affecting share prices in finance companies in Sri Lanka for the period of five years, from 2017 to 2022. For that purpose, researchers selected the independent variable as the share price, while the dependent variables are earnings per share (EPS), return on equity (ROE), interest rate, inflation, and exchange rate. The researchers collected data from the CSE data library, Company annual reports, and Central Bank Reports. The STATA was used to analyze the data in this study. Descriptive Statistics, Correlation Analysis, Regression Analysis were performed as analytical tools. The findings highlighted that EPS and inflation positively impact raw material pricing, while ROE, interest rate, and exchange rate showed a negative impact. But only EPS shows a significant impact on the raw material pricing. This study suggested to take at least 10 years duration for data collection and consider more internal and external factors.
Issues and challenges in IFRS adoption: Perceptions of the Professional Accountants in Sri Lanka
(Department of Accountancy, University of Kelaniya, Sri Lanka., 2023) Vidanage, K. R.; Rajakaruna, I. R. H. M. T. P.; Kumari, J. S.
This study mainly focused on identifying the IFRS adoption issues and challenges in the perception of Sri Lankan professional accountants. Professional Accountants face many obstacles when adopting the IFRS and identifying those issues and challenges and finding significant factors for them is mainly focused on his study. This study directly identifies what are the issues and challenges faced by Sri Lankan Professional Accountants and how the Accountants’ perception of issues and challenges are varied with the geometric characteristics. The quantitative research approach was used in the study and the questionnaire survey method was used to collect data from the Professional Accountants. The study used the convenience sampling technique to identify the sample for the study while ensuring representativeness. The sample size was 200 accountants. The Likert scale questionnaire was based on the literature and expert opinion on Sri Lankan IFRS adoption issues and challenges. To identify the major issues & challenges faced when adopting the IFRSs in the perceptions of professional accountants and identify the difference in perceptions on IFRS adoption issues and challenges of Accountants based on demographic characteristics Descriptive statistics and independent t – tests have been used. The study's findings particularly demonstrated that the accountants recognized every problem except one as having an impact on their work. A number of demographic factors were also examined, including gender, experience level, highest academic degree earned, professional certifications, and the sector. The study addresses the research gap in understanding the problems with IFRS adoption in Sri Lanka while offering useful insights for policymakers.
Taxation Potency on Human Capital Development: Verdict from Panel Fixed Effect Model
(Department of Accountancy, University of Kelaniya, Sri Lanka., 2023) Adegbite, T. A.; Adamu, U.; Salihu, K.
This study examined taxation impact on human capital development in North Central States in Nigeria. The data emanated from the state boards of internal revenue, office of Accountants general, state planning commission of the selected states in North Central Nigeria and the National Bureau of Statistics' document from 2010 to 2020. The selected states are Kwara, Niger, Kogi, Benue, Nasarawa and Plateau states. The study used econometric model to examine how taxes affect growth of human capital development. The numerical estimate of the co-efficient in various equations was obtained using panel data analysis through pooled regression, fixed model, random effect model and Hausman test. The findings showed that personal income tax and value added tax have positive and significant effect on human capital development. Road tax has positive and insignificant effect on human capital development. More so, external loan has positive and significant effect on human capital development in North central states Nigeria. It is concluded that taxation significantly impacted human capital development in north central states, Nigeria. It is recommended that taxation funds should be fully channeled by government into development of human capital properly, and meticulously utilized and managed efficiently to absolutely attain and improve human capital in North central states, Nigeria. Also, government should involve the usage of electronic means for collection of taxes from road users in order to track or drive all the road users into tax net, and to reduce or eradicate road tax evaders so as to enhance revenue drive.
The Effect of Climate Risk on Stock Market Performance Evidence from Sri Lanka
(Department of Accountancy, University of Kelaniya, Sri Lanka., 2023) Priyadarshani, G. W. Y.; Perera, L. A. S.
This study aims to identify the effect of climate risk on stock market performance in Sri Lanka. As an island, the country is frequently affected by climate change variabilities. Due to the higher climate risk exposure of Sri Lanka, it is highly needed to identify the risk at a prior stage. As, this is the first study in Sri Lanka to identify the climate risk impact on stock market performance the primary objective of this study is to identify the climate risk effect on the All-Share Price Index, Standard and Poor’s SL20 index and 20 industry groups according to the GICS classification. The considered climate risk variables are drought, flood, high wind, heavy rain, landslide, and lightning. The findings of the study revealed there is no significant impact from climate risk variables to the All-Share Price Index, and Standard and Poor’s SL20 index. However, the analysis discovered significant impact of several climate risks to certain specific sectors of CSE such as drought significantly impacts automobiles and components, banking and transportation sectors. At the same time, the high wind is a key factor for food, beverage and tobacco. The drought and high wind influence are significant in sectors like capital goods, utilities, consumer durable and apparel, consumer services, healthcare, equipment and services, materials and household and personal products. As well as drought and lightning have a significant impact on the commercial and professional service sector and energy sector while the diversified financial sector is impacted by drought, high wind and heavy rain. Apart from that, sectors like food and staples, retailing, insurance, real estate and telecommunication are unaffected by any climate risk factor. At the same time, the pharmacy and bio-tech industries are impacted by all the climate risk variables except floods. Ultimately, the study's findings will provide direction to decision-makers including potential investors to consider the climate risk in their decisions making processes.
The Impact of Working Capital Ratios on Operational Performance under Covid-19 Pandemic: Evidence from Listed Material Sector Firms in Sri Lanka
(Department of Accountancy, University of Kelaniya, Sri Lanka., 2023) Dilini, R. A. D. K.; Gunasekara, A. L.
This paper investigates whether the Covid-19 pandemic impacts the association between working capital ratios and operational performance. Using comparison tests by taking a sample of listed material sector firms in Sri Lanka from 2019Q1 to 2021Q2, this study first examines whether working capital ratios have become statistically different between pre Covid-19 period and during the Covid-19 period. Secondly, this paper employs panel regression analysis for pre-Covid-19, during Covid-19 and the full samples to identify how Covid-19 has reshaped the association between working capital ratios and operational performance measured by return-on-sales (ROS). The results show that, apart from days-sales-outstanding (DSO), other working capital measures are similar between the pre-Covid-19 period and during the Covid-19 period. Further, the results suggest that ROS is higher when firms delay payments to suppliers during pre Covid-19 period. However, this paper finds that ROS is not responsive to working capital ratios during the Covid-19 period.