Commerce and Management
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Item Impact of Covid-19 on Stock Market Indices: Evidence from Colombo Stock Exchange(Department of Finance, University of Kelaniya., 2023) Adikari, A. A. V. S.; Buddhika, H. J. R.Purpose: The study intends to address the question, “What is the impact of the Covid-19 pandemic on stock market indices in the Colombo Stock Exchange”. This would support potential and existing investors to understand the behaviour of the stock market during the pandemic to make effective long-term decisions since there are only a few studies currently available in Sri Lankan context. Design/Methodology/Approach: A log-linear multiple regression model was executed whereby the dependent variables, All Share Price Index and S&P SL 20 index, were regressed against independent variables, daily new cases and deaths reported, fiscal and monetary policy measures implemented, and island-wide travel restrictions imposed during the period to analyze the impact of Covid-19 on the financial market over 270 days, from 27th January 2020 to 30th April 2021, covering two waves of the pandemic. Findings: The regression analysis revealed a positive relationship between the stock indices and the number of daily cases and deaths and a negative relationship with the travel restrictions imposed during the period. The policy measures implemented by the Government of Sri Lanka were insignificant in the index movements. Based on the results of this study, a positive impact on the stock indices was discovered during the pandemic; hence investors should refrain from panic withdrawals from the market. Originality: This is among the few studies to analyze the stock market performance during the Covid-19 pandemic adapted to the Sri Lankan context. The variables taken in the study can cover various aspects of the pandemic situation.Item Modeling the Best ARIMA Modeling Approach for Forecasting Market Indices in Colombo Stock Exchange, Sri Lanka.(8th International Conference on Business & Information ICBI – 2017, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2017) Madushani, M. L. P.; Erandi, M. W. A.; Madurangi, L. H. L. S.; Sivaraj, L. B. M.; Weerasinghe, W. D. D.; Jayasundara, D. D. M.; Rathnayaka, R. M. K. T.Generally, the movements of the stock prices are highly volatile and make much more dynamics. As a result day by day the large number of companies has been listed on stock exchanges across the world. Under this scenario, examine a suitable model for forecasting stock prices is a biggest challenge in the modern world. The propose of this study is to examine a suitable model for forecasting stock prices in the Colombo Stock Exchange (CSE), Sri Lanka. Since the data has a non-seasonal linear trend, an autoregressive integrated moving average model was used for modeling and forecasting. The empirical results suggested that ARIMA model is more accurate for forecasting ASPI index than other traditional regression methods.Item 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.Item 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.Item Relationship between Stock Market Performance & Economic Growth: Empirical Evidence from Sri Lanka(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 affects 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 was 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 extends the literature, providing valued information to economists in developing countries and to the academia.Item The Effect of Foreign Exchange Market Returns on Stock Market Performance in Sri Lanka(Faculty of Commerce and Management Studies, University of Kelaniya, 2015) Perera, M.Exchange rate is one of the most influencing macroeconomic variables on stock returns in most of the countries. Thus, main objective of this study is to identify the effect of foreign exchange market returns on stock market performance in Sri Lanka. In order to evidence the study, researcher used publicly available secondary data from Colombo Stock Exchange and Central Bank of Sri Lanka. According to Guneratne (2011), exchange rate has a strong explanatory power in determining the stock market returns of the country. All share price index percentage changes are observed as dependent variable and the respective percentage changes of USD/LKR, EUR/LKR and GBP/LKR exchange rates as independent variables of this research. Exchange rate data for the period of 2002 to 2014 are considered for the research. A linear multiple regression model is developed to find the relationship between selected variables and following Noel & John (2009), correlation between variables are tested. Results of the research discloses that USD/LKR and GBP/LKR exchange rate returns have a strong explanatory power to All share price index (ASPI) returns. At the same time USD/LKR returns exhibits a negative correlation while other two exchange rates have a positive but weak correlation to ASPI returns. Findings of this research provide valuable information to investors in equity markets, to forecast potential stock returns with reference to exchange market fluctuations.Item Stock Market Performance under Different Presidential Terms: Evidence from Sri Lanka(Faculty of Commerce and Management Studies, University of Kelaniya, 2015) Piyananda, S.D.P.; Fernando, P.N.D.Colombo Stock Exchange (CSE) plays a vital role in the growth of the key sectors of Sri Lankan economy. Even though there are several macro and firm specific factors effect on stock market performance, the main focus of this study is to examine the performance of CSE under different government leadership in Sri Lanka during the period from 1994 to 2014. This study mainly consider about the stock market indicators such as, All Share Price Index (ASPI), market turnover, market capitalization, turnover ratio, average market return etc. under different presidential terms. The sample period has divided in to four main presidential terms. Based on the indicators calculated to reflect the average market return, volatility and risk for each presidential term and based on the statistical analysis performed for each presidential term it was revealed that performance of stock market is superior under presidential term II (from 1999-2005).Item The Relationship between Earnings, Dividend and Stock Returns in Sri Lanka(Faculty of Commerce and Management Studies, University of Kelaniya, 2015) Silva, N.L.C.Sri Lankan banking sector which was primarily led by the continuation of relaxed monetary policy and improved macro-economic performance, remained robust in the recent past. Sri Lankan banking sector is administered by the Monetary Law Act and Banking and Exchange Control Act. Three forms of financial institutions are legalized under Banking Act and the Finance Companies Act to function in Sri Lanka by the Central Bank of Sri Lanka. Those three pillars are Licensed Commercial Banks, Registered Finance Companies and Licensed Specialized Banks. Sri Lankan stock market experienced various fluctuations and this resulted in a decrease in the individual investments since this made difficult for individual investors to make their investment decisions. The purpose of this study is to make the individual investment decisions by considering the financial variables. This study will help the individual investors to their decision making process, using financial variables other than the economic variables. Researcher intend to collect secondary data from audited financial statements of Sri Lankan Licensed Commercial Banks and from the All Share Price Index (ASPI). To calculate the earnings, dividends and stock returns the researcher will use Earnings per Share (EPS), Dividend per Share (DPS) and Average Stock Price. To test the stated variables researcher will use the Ohlson model (Ohlson, 1995). The expected outcome of this study would be a positive relationship between earnings, dividends and stock return of licensed commercial banks of Sri Lanka.