Symposia & Conferences
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Item The week of the month effect of stock returns: Empirical evidence from the Colombo Stock Exchange(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Perera, M. A. M. M. F.; Madhushani, P. W. G.Introduction: The purpose of this study is to examine the existence of the week-of-the-month effect in the Colombo Stock Exchange (CSE) from 2014 to 2024 while considering the effects of the significant economic event in Sri Lanka that has any impact on the week-of-the-month effect. Methodology: Weekly closing prices of the All Share Price Index (ASPI) were collected from CSE for a sample period of 10 years, from 2014 to 2024. The weekly returns of the ASPI were calculated using the logarithm rerun calculation formula. The study used the Ordinary Least Square Method (OLS), GARCH model and EGARCH model to examine the effect. To explore the best-fitted models, GARCH and EGARCH models were compared using AIC and SIC. Findings: The results of the study revealed that there is a third-week effect in period 01 and a fifth-week effect in period 02 at a 5% significant level. In the full period, there is a negative third-week effect at a 10% significant level and a positive fifth-week return at a 5% significant level. Conclusion: The findings of the study indicate that there is a week-of-the-month effect exists in Period 1, Period 2, and the Full period in CSE. Also, it is highlighted that the Colombo Stock Exchange is not a weak form efficient market since the investors can earn abnormal returns using trading strategies constructed using the historical information of stock prices.Item Impact of Climate Finance on Debt Sustainability: An Analysis of Green Climate Finance and Debt-for-Climate Mechanisms in Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Razana, J. F.; Perera, L. A. S.Introduction: Unsustainable national debt and growing climate change vulnerability are Sri Lanka's two main problems. This paper explores how climate finance tools like debt-for-climate swaps and green bonds might reduce the nation's debt load while boosting climate resilience. A substantial empirical evidence vacuum about the quantitative effect of climate funding on debt sustainability is filled by the study. Methodology: The study used secondary data from 2015–2023 that was obtained from organizations such as the Central Bank of Sri Lanka, the IMF, and the Green Climate Fund. It did this by using a positivist research philosophy and a deductive technique. The association between debt-to-GDP ratios and climate finance inflows was assessed using statistical techniques such as regression and correlation analysis. Findings: The results showed that while climate financing systems have theoretical potential, there is currently little evidence of their actual influence on debt sustainability. Negligible regression results and weak correlations imply that present inflows are not enough to considerably lower Sri Lanka's burden of debt. The primary barriers were found to be ineffective resource allocation, institutional imperfections and a lack of conformity with national fiscal policy. The study highlights the possibility of expanding these mechanisms and incorporating them into all-encompassing debt management plans despite these barriers. Conclusion: According to the study's findings, climate finance can help address Sri Lanka's environmental and economic problems, but its efficacy is dependent on improved policy coordination, larger funding scales, and strengthened institutional ability. Among the suggestions are improving governance structures, encouraging private sector involvement, and coordinating climate finance instruments with more comprehensive fiscal plans.Item The Month of the Year Effect of Stock Returns: Empirical Evidence from the Colombo Stock Exchange(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Anubuddhika, D. G. J.; Madhushani, P. W. G.Introduction: The Efficient Market Hypothesis (EMH) assumes that stock prices fully reflect all the available information ensuring stock market efficiency. The prevalence of seasonal effects leads to market efficiencies, enabling investors to reap abnormal returns. The purpose of this study is to investigate the existence of the January effect of the All-Share Price Index (ASPI) on the Colombo Stock Exchange (CSE), which is supported by the previous findings considering how the most significant economic events in Sri Lanka affect this phenomenon. Methodology: This study examines the stock market anomalies focusing on 10 years of ASPI monthly returns from 2014–2024, which were converted into natural logarithm returns. To address the existence of ARCH effects in the residuals, such as GARCH and EGARCH, apart from the OLS regression model. Findings: Even though there is a negative January effect, the results indicate that there is a positive July effect for the full period, a positive April effect for the pre-crisis period and a significant negative March effect for the post- and recovery period (after 2022). Conclusion: According to the results, EMH is a contradiction as the results exhibit that there are anomalies during the full period, pre-crisis, and post-crisis period. In conclusion, CSE is not a weak form efficient suggesting that investors can earn abnormal returns by applying investment strategies observing historical stock patterns.Item The Moderating Impact of Financial Performance and Stock Returns on the Relationship Between Corporate Governance and Corporate Value. Evidence from Top-Rated Companies in Sri Lanka’s S&P SL 20 Index(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Abeywickrama, H. W. A. D. S.; Kethmi, G. A. P.Introduction: This research demonstrates how financial performance and stock returns moderate the link between corporate governance and corporate value. The study has been conducted on firms in the S&P SL 20 Index. It addresses how sound governance mechanisms affect firm value, and how stock returns and financial performance either enhance or suppress these impacts. Methodology: The study uses a quantitative research methodology where data from 20 listed firms in the S&P SL 20 index is analyzed over the period 2014 to 2024. To conduct this analysis secondary data from annual and quarterly reports were utilized. The diagnostic test used the Panel data analysis to assess the model's validity. Further, to analyze the moderate effect of stock return and financial performance regression models were developed. Findings: This analysis shows a significant relationship between corporate governance and corporate value, a weakly positive relationship. Stock returns moderate the relationship between better corporate governance and corporate value. Financial performance, which is measured through ROA and ROE also enhances the link between good corporate governance and corporate value. Conclusion: The study supports the importance of proper governance structures in the development of corporate values. The findings are informative for policymakers and investors, calling for efforts to build governance mechanisms in firms while relying on financial indicators and market conditions to increase firm value.Item The Influence of Managerial Ownership and Firm Size on Debt Policy Evidence from Listed Manufacturing Companies in Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Abdullah, M.; Ranjani, R. P. C.Introduction: This study looks at how managerial ownership and firm size affect debt policy in listed manufacturing companies in Sri Lanka, using data from the Colombo Stock Exchange (CSE) from 2013 to 2023. It shows that when managers own shares, it reduces conflicts between managers and shareholders, while firm size impacts borrowing capacity and leverage. The research provides useful insights into how these factors influence debt policies in Sri Lanka and fills gaps in existing studies, offering practical guidance for better financial decision-making. Methodology: In this study, a quantitative approach was used, analysing panel data from 10 companies listed on the Colombo Stock Exchange (CSE) over the past 11 years. The main variables examined were managerial ownership (measured by the percentage of shares held by management), firm size (measured by total assets), and debt policy (measured by the debt-to-equity ratio). Multiple regression analysis was conducted, along with diagnostic tests like the variance inflation factor (VIF) and autocorrelation tests, to ensure the reliability of the data and the accuracy of the results. Findings: The study shows that more managerial ownership leads to higher debt because it aligns managers’ interests with shareholders. It also finds that larger companies use less debt, likely due to stronger financial positions. The analysis highlights differences in ownership and firm sizes, and the diagnostic tests confirm the results are reliable.Item The Impact of Capital Structure on Firm Performance: A Comprehensive Analysis of the Sri Lankan Plantation Companies Before and During the Crisis Evidence From Selected Listed Plantation Companies in Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Vitharamage, V. N. R.; Gunasekara, H. M. A. L.Introduction: The purpose of this study is to determine the impact of capital structure on firm performance. This study provides a comprehensive analysis of the Sri Lankan plantation companies before and during the crisis as this sector remains an unexplored area which plays an important role in their economies. Methodology: This research uses positivism research philosophy and the quantitative research approach and uses the convenience sampling method. This study is primarily based on secondary data that were extracted from the annual reports of companies listed in Colombo Stock Exchange (CSE) over the past eight-year period from 2016 to 2023. Balanced Panel Data (BPD) of 15 plantation companies were analyzed using STATA software, which included statistical tests such as normality, multicollinearity, heteroscedasticity, autocorrelation, cross sectional dependance, and panel regression analysis. Further this study uses a comparison test to identify the statistical difference in the periods. Findings: According to the findings of the study, the results confirm that there is a statistically significant difference in terms of ROE and ROA before and during the crisis. All the independent variables, excluding TDTE, also show a statistically significant difference between the periods. According to the regression analysis, it shows a negative and statistically significant relationship between TDTE and ROE and positive and statistically significant relationship between ICR and ROE. TDTA negatively impacts ROA, and the effect is statistically significant. As well as there is a statistically significant causal relationship between ROA and Interest Coverage Ratio. Finally, the overall models are statistically significant. Conclusion: The findings indicate that the crisis had a notable effect on plantation companies' financial performance and suggest that debt is not a primary strategy to cope with the crisis. Therefore, this study is advisable for firms to consider their funding strategies and manage their total debt wisely to sustain the overall performance by adapting to the market conditions.Item The Impact of Regulatory Capital on Credit growth, Non-Performing Loans, And Bank Efficiency: Evidence from Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) De Silva, W. M. L. H. K.; Dissanayake, D. M. U. H.Introduction: This paper is regarding the effect of capital regulatory requirements on credit growth, non-performing loans, and bank efficiency in Sri Lanka, focusing on 2008–2022 years. The banking industry in Sri Lanka has faced grabbing new opportunities, as well as challenges, especially in balancing the requirement for capital adequacy with operational performance, since the Basel III laws took effect. Methodology: The study done a quantitative methodology, evaluating a balanced panel dataset from ten commercial banks with fifteen years, using econometric models such Ordinary Least Squares (OLS), Fixed Effects, and Random Effects. The Capital Adequacy Ratio (CAR), Net Interest Margin (NIM), credit growth, and non-performing loan (NPL) ratios are significant variables that have control for macroeconomic factors which include GDP growth and the policy rates. Findings: The findings imply that growing capital reserves reduce lending ability since higher CAR levels have an inverse impact on credit expansion. Conversely, there is a positive relationship between CAR and NIM, revealing that higher capital buffers lead to improved operational stability and performance. Nevertheless, there is an astonishingly helpful relationship between CAR and NPLs, which would imply that high credit risk and not poor loan quality should require high reserves. These findings demonstrate how regulatory capital plays a twin role of improving bank stability and risk management at the cost of availability and prosperity of lending. It follows, therefore, that the policymakers should consider a balanced rules approach where capital requirements are adjusted for market conditions and bank-specific risks. Negative impacts on nonperforming loans and credit growth can be softened by increasing operational efficiency and practices related to risk management. Conclusion: This research contributes to our knowledge of the intricate relationships between regulatory capital and banking performance in developing countries by providing guidance to improve financial regulations to ensure stable and sustainable growth in the banking sector in Sri Lanka. I focus further on the logic behind these collaborations at the end. Why it is each positive and negative.Item The Impact of Transparency and Disclosure and Financial Distress on the Financial Performance: Evidence from Licensed Commercial Banks in Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Nanayakkara, K. A. D. C. M.; Samarawickrama, A. J. P.Introduction: Transparency and disclosure and financial distress are the critical factors affecting the financial performance of bank institutions. This research presents the relationship between these factors and the financial performance of commercial banks operating within the Sri Lankan market. The primary aim of this research is identifying the impact of transparency and disclosure and financial distress on the financial performance in licensed commercial banks in Sri Lanka. Methodology: The sample of the research consists with eighteen licensed commercial banks in Sri Lanka for a period of 2014 to 2023. Transparency and disclosure and financial distress were considered as the independent variables of the regression models. The firm performance of the licensed commercial banks was considered as the dependent variable which was measured based on return on assets and return on equity. Descriptive analysis, correlation analysis and panel data regression were engaged to analyze the data in this study. Findings: The findings revealed that transparency and disclosure has a negative and insignificant impact on firm performance measured by return on asset and financial distress has a positive and insignificant impact on return on asset. Also, the analysis revealed that transparency and disclosure has negative and insignificant impact on return on equity and financial distress has a negative and significant impact on return on equity. Conclusion: The study concluded that in Sri Lankan context, transparency and disclosure have a negative impact on return on asset, and financial distress has a negative impact on return on asset. However, these variables have no significant impact on ROA. And the transparency and disclosure and financial distress have a negative impact on return on equity. Financial distress is significant, and transparency and disclosure have an insignificant impact on ROE.Item The Impact of Monetary Policy on Stock Market Performance: Evidence from Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Nimesha, A. T.; Piyananda, S. D. P.Introduction: The study explores the pivotal role of monetary policy in shaping stock market performance, focusing on Sri Lanka's All Share Price Index (ASPI). It highlights the critical influence of monetary tools like Treasury Bill Rate (TBR), Money Supply (M2), Standing Lending Facility Rate (SLFR), and Statutory Reserve Ratio (SRR) alongside macroeconomic variables like the Exchange Rate and Inflation Rate. By addressing the gaps in existing literature, particularly during the post-COVID-19 economic crisis, the research emphasizes the dynamic interplay between monetary policy and market performance. Methodology: This will be a quantitative test based on secondary data from July 2014 to August 2024, which was extracted from the Colombo Stock Exchange and Central Bank of Sri Lanka. Analyzing the research will draw upon econometric methods which include tests of unit roots, regression analysis, and diagnostic checks for multicollinearity, heteroskedasticity, and autocorrelation in order to draw conclusions about how monetary policy variables affect the ASPI. The model has been developed considering its robustness and reliability by incorporating all the required macroeconomic indicators as control variables. Findings: The above analysis indicates that monetary policy variables such as money supply, treasury bill rate, and inflation rate are positively and significantly related to ASPI. Thereby, these variables prove to be the important contributors toward improving stock market performance in Sri Lanka. On the contrary, SLFR and ER negatively influence ASPI, reflecting the devastating effects of the tight monetary stance and currency depreciation on market dynamics. The contribution of the SRR, though positive, is insignificant to explain the trend in the stock market. All diagnostic tests prove that the estimated model is reliable and free from multicollinearity, heteroskedasticity, or autocorrelation. The findings emphasize that monetary policy does not have a one-way effect on the stock market in Sri Lanka. Conclusion: Monetary policy significantly influences the performance of the stock market in Sri Lanka; therefore, proper monetary interventions are very important in creating a stable and prosperous market. Though the findings support theoretical expectations and prior literature on the subject, there are limitations to this present study, which include exclusion of some of the key macroeconomic variables, such as fiscal policy, and also sector-specific analysis. Thus, future study could elaborate more on those dimensions and create more comprehensive insights. These are very important findings in terms of the policy implications for policymakers and investors in developing an appropriate view of how monetary policy affects stock performance in emerging economies.Item Investigating the Impact of Economic Shocks on the Renewable Energy Industry Growth in Sri Lanka: A Cointegration Approach Using the ARDL Model(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Fernando, H. D. T.; Gunasekara, A. L.Introduction: Sri Lanka is a country that faced many adverse situations such as the tsunami in 2004, the civil war, covid pandemic, the Easter Sunday bombing and the economic crisis. Thus, it is important to study how these changes in economic variables impact economic activities of the country. The renewable energy industry, which is an industry with immense potential and high volatility is the center of economic activity and sustainability. Therefore, this study aims to investigate the impact that macroeconomic shocks have on the renewable energy industry returns in Sri Lanka. Methodology: This study collected data for 5 firms in the renewable energy industry listed on the Colombo Stock Exchange for a sample period of 10 years, from 2014 to 2024. Using a quantitative approach, this study collected secondary data from CapIQ. The Colombo Consumer Price Index (CCPI), Average Weighted Lending Rate (AWLR), and Industrial Production Index (IPI) were taken as the explanatory variables to reflect economic variables and were obtained from the CBSL publications. These three variables were used to investigate the long-run and short-run relationship between the variables. The Autoregressive Distributed Lag model (ARDL) was used in this study to analyze the short-run and long-run relationship between the variables. Findings: The results of the study revealed that the average weighted lending rate has a negative and statistically significant impact on the renewable energy returns in the long-run, and in the short run the Industrial Production Index has a positive and statistically significant impact on the renewable energy returns, and in the short run the AWLR has a negative and statistically significant impact on the renewable energy returns in Sri Lanka. Conclusion: The findings of the study can be used by industrial experts to plan ahead and mitigate risk relating to economic shocks caused by changes in macroeconomic variables and by policy makers to set policies conducive to the growth of the renewable energy sector for sustainable development of the economy.