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    Stock Market Development and Economic Growth: Empirical Evidence from Sri Lanka
    (Department of Accountancy, University of Kelaniya, Sri Lanka., 2021) Kengatharan, L.; Vanajah, S.
    The financial markets have played a crucial role in the country's economic life for a long time. The objective of this study was to examine the empirical relationship between stock market development and economic growth in Sri Lanka. This study used annual time series data for the period from 1990 to 2018 which were collected from the annual reports of the Colombo Stock Exchange (CSE) and the Central Bank of Sri Lanka. The data were analyzed employing co-integration test, and vector error correction model (VECM). The results of VECM revealed that stock market capitalization, foreign direct investment, and inflation have a significant impact on economic growth, while turnover has not significantly influenced economic growth. The findings of the study have an important implication for the economic policymakers and government of Sri Lanka to enhance economic growth. Further, research can be extended by choosing more periods of data and choosing other indicators of stock market development indicated in previous studies.
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    Determinants of Non-Performing Loans: Evidence from Sri Lanka
    (Department of Finance, University of Kelaniya., 2022) Rathnayake, R. M. S. S.; Dissanayake, D. M. R. U.
    Purpose: The increasing trend of non-performing loans in Sri Lanka threatens the banking system. This study attempts to identify the determinants of non-performing loans in licensed commercial banks in Sri Lanka to fill the void in the finance research arena. Methodology: This study is carried out with a sample of eight licensed commercial banks using macroeconomic factors and bank-specific factors: the real interest rate, annual GDP growth rate, annual inflation rate, exchange rate, unemployment rate, the efficiency of the bank, bank size, lending rate, and ROA. Financial data were analyzed for the period of 2008-2018 using panel data regression analysis. Findings: Results show that GDP growth rate, Exchange rate, Unemployment rate, inflation rate, and bank size have a significant effect on non-performing loans in the Sri Lankan banking industry. However, bank efficiency and return on asset (ROA) do not significantly correlate with NPLs. Among these relationships, only the exchange rate shows a positive relationship with the NPL, whereas all other variables show a negative relationship. Implications: According to the study's findings, it is recommended that Sri Lankan commercial banks have their focal point on credit risk management based on maximizing return on its assets while keeping its non-performing loans within acceptable limits.
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    Examining the Role of Inflation Moderation in Mitigating the Impact of Crude Oil Prices on Indonesia's Sharia Stock Market
    (Faculty of Commerce and Management Studies, University of Kelaniya., 2023) Noval, N.; Syamsu, N.; Sofyan, S; Rifai, R. A.
    This study investigates the impact of crude oil prices on Indonesia's Sharia stock market, considering inflation as a moderating variable to address existing debates in prior research. Utilizing data from June 2011 to December 2021, including the Indonesian Sharia Stock Index (ISSI), World Texas Intermediate (WTI), and inflation, the study employs Moderated Regression Analysis (MRA) to uncover significant positive correlations between crude oil prices and the Sharia stock market. The findings highlight the moderating role of inflation, indicating that the market weakens when crude oil prices rise alongside inflation and strengthens in the absence of inflationary pressures. Practical implications suggest portfolio diversification for investors to manage associated risks. The study contributes theoretically by introducing additional moderator variables and offers empirical insights, yet acknowledges limitations, advocating for further research to deepen the understanding of the complex relationship between crude oil prices, inflation, and the Sharia Stock Market in Indonesia.