Students’ Research Symposium - Department of Finance (SRS-DFIN)
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Item Short-Term Interest Rates and Expected Stock Returns: Evidence from Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, 2015) Subasinghe, S.A.D.P.S.The relationship of Sri Lankan short term interest rate and expected stock return was different from and foreign market. The theories and prior foreign studies results were negative relationship among the variables. This study examines the relationship between short term interest rates, as measured by Treasury bill yields of 91 days, 182 days and 364 days Treasury bill rates and stock returns in Sri Lanka. Regression analysis is employed to analyze the short term interest rate and stock return for the period of 2005 to 2015. It is employed on monthly, quarterly and annual time horizon. Stock returns based on All Share Price Index (ASPI) and S&P SL 20 index are used in the study and Treasury bill yields of 91 days, 182 days and 364 days are considered as the short term interest rates in this study. Furthermore analyze the periodically to identify the effect of after end the war in to the Sri Lankan economy in relating to the current research. The result of current research shows that negative relationship between interest rate and stock return in Sri Lanka. Furthermore, the Treasury bill rates effect on Stock return, becomes lager and more significant with longer maturity Treasury bill yield. Treasury bill yields explain up to 13%, 17%, and 13% in monthly, quarterly and annual returns respectively. Further it reveals that the explanatory power increases with the longer time horizon.Item A Study on Mandatory Offer Announcements and its Impact on Stock Return in Colombo Stock Exchange(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, 2015) Ekanayaka, E.M.R.K.This study attempts to examine the impact of mandatory offer announcements on stock return on the Colombo Stock Exchange and highlights the mandatory offers and its grounds in the legal system in Sri Lanka. Although there are number of studies done on mandatory offers, it is hard to find the studies on impact of mandatory offers on stock return in Sri Lankan context. The primary aim of this study is to study the impact of mandatory offers on stock return in Colombo Stock Exchange using the sample from year 2010 to 2014. The study used secondary data for the purpose of analysis employing the event study methodology. More specifically, it employs the market model in generating abnormal returns surrounding mandatory offer announcement. The findings of this study demonstrated that on average market reacts positively to mandatory offer announcements. The market takes considerable time to fully incorporate information contained in mandatory offer announcements by the bidder firms and considerable anticipatory effect reflect the target firms. This research will be important to all those take interest in the share market. Especially it is more important to the investors, managers of the companies’ stock exchange regulatory agencies in their decision making.