South Asian Journal of Finance
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Item The Impact of Product Diversification and Insurance Activity to Insurance Industry Performance: Moderating Effect of Insurance Penetration: Evidence from India, Pakistan, and Sri Lanka(Department of Finance, University of Kelaniya., 2024) Rathnasiri, S. M. H. G.; Buddhika, H. J. R.Purpose: The research focused on the insurance industry performance of India, Pakistan & Sri Lanka were supposed to find the impact of product diversification and Insurance activity towards industry performance measured by ROE. Further insurance penetration is considered a moderating variable and objectives same as mentioned above. Product diversification and Insurance activity are key indicators of the insurance industry and insurance penetration is a key indicator of country performance measurement. Methodology: This quantitative study considered countries of Sri Lanka, India, and Pakistan in the South Asian Region and considered the period data from 2012 -2022. The highest developed first three countries were considered for evaluation purposes and diversified (companies operating in both Life & General) insurance companies from each country. Findings: Both product diversification and insurance activity exhibit negative correlations with insurance industry performance, indicating that increasing either factor may result in lower financial performance for insurers in these countries. Furthermore, insurance penetration significantly moderates the relationship between product diversification and insurance industry performance. The three hypotheses formulated and stated that impact is negative for product diversification and insurance activity. Further stated that insurance penetration moderated the insurance industry's performance. Conclusion: The findings underscore the importance of prudent strategic planning and management for diversified insurance companies in India, Pakistan & Sri Lanka. Diversified insurance firms are advised to carefully weigh the trade-offs between diversification and profitability. While diversification can mitigate risk, it may also lead to diminishing the returns in long run.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.