Browsing by Author "Chathurika, H.L.D.J."

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Determinants of Financial Performance of listed Insurance Companies in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Dilrukshi, M.A.A.P.; Chathurika, H.L.D.J.
Introduction: Due to the intangible nature of insurance products and the lack of transparency in the market, the criteria that affect the financial performance of an insurance company are complex. As a result, the financial performance of insurance companies is important to various stakeholders, such as insurers, insurance intermediaries, and policymakers. The purpose of this study is to investigate the factors that determine the financial performance of insurance companies in Sri Lanka. Design/Methodology/Approach: The sample consists of 5 listed insurance companies, including both of life and non-life insurance companies in Sri Lanka, over 2015-2020. The analyses include five variables which internal factors are liquidity ratio, leverage ratio, asset turnover, and external factors are the growth of the economy and interest rate. The financial performance is measured using return on asset (ROA) and return on equity (ROE). Descriptive statistics and regression models were used to analyze the data set through Stata-13 Software. Findings: This study's findings emphasize that there is a significant negative relationship between the liquidity, leverage, and interest rate on return on equity (ROE) of the listed insurance companies in Sri Lanka. In addition to that, asset turnover and growth of the economy have a significant positive relationship between the return on equity (ROE) of the listed insurance companies in Sri Lanka. Conclusion: The managers need to monitor liquidity and leverage internally to achieve higher financial performance while facing external shocks
Determinants of Financial Performance of listed Insurance Companies in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Dilrukshi, M.A.A.P.; Chathurika, H.L.D.J.
Introduction: Due to the intangible nature of insurance products and the lack of transparency in the market, the criteria that affect the financial performance of an insurance company are complex. As a result, the financial performance of insurance companies is important to various stakeholders, such as insurers, insurance intermediaries, and policymakers. The purpose of this study is to investigate the factors that determine the financial performance of insurance companies in Sri Lanka. Design/Methodology/Approach: The sample consists of 5 listed insurance companies, including both of life and non-life insurance companies in Sri Lanka, over 2015-2020. The analyses include five variables which internal factors are liquidity ratio, leverage ratio, asset turnover, and external factors are the growth of the economy and interest rate. The financial performance is measured using return on asset (ROA) and return on equity (ROE). Descriptive statistics and regression models were used to analyze the data set through Stata-13 Software. Findings: This study's findings emphasize that there is a significant negative relationship between the liquidity, leverage, and interest rate on return on equity (ROE) of the listed insurance companies in Sri Lanka. In addition to that, asset turnover and growth of the economy have a significant positive relationship between the return on equity (ROE) of the listed insurance companies in Sri Lanka. Conclusion: The managers need to monitor liquidity and leverage internally to achieve higher financial performance while facing external shocks
Factors Affecting Demand for Life Insurance in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Kasthurirathna, K.T.A.D.H.; Chathurika, H.L.D.J.
Introduction: This research study examines the factors that influence the demand for life insurance in Sri Lanka. Design/Methodology/Approach: Factors affecting the demand for life insurance have been analyzed using secondary data from the annual reports of CBSL, IBSL and the World Bank from 1990 to 2019. The dependent variable for the study was life insurance density, while the independent variables were income level, inflation, urbanization, social security, youth dependency & life expectancy. Multiple regression analysis method was used for data analysis. Findings: According to the research results, income level and social security from the selected independent variables showed a significant positive relationship with the demand for life insurance. Also, young dependency and life expectancy have had a significant negative impact on the demand for life insurance. Excluded from the backward stepwise process because urbanization and inflation did not show a strong link with life insurance consumption. Conclusion: This study shows that socio-economic factors have a significant impact on the demand for life insurance in Sri Lanka. Accordingly, the future of the life insurance market will depend on the behavior of those factors.
The Impact of Board Composition and Ownership Structure on Dividend Policy: Evidence from Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Pramodya, L.A.D.K.; Chathurika, H.L.D.J.
Purpose: The Impact of Board composition and Ownership structure on Dividend policy is one of the major concerns in Sri Lanka. The main objective of the study is to examine the impact of Board composition and ownership structure on firm’s Dividend policy of 41 listed companies on the Colombo Stock Exchange of Sri Lanka, over the period from 2016 to 2021. Design/Methodology/Approach: This study is used three indicators under the Board composition such as Board size, Board meetings and Board independence and used three indicators under the Ownership structure such as Managerial ownership, Institutional ownership, and foreign ownership. Furthermore, this study considers three control variables such as Firm size, Firm leverage, and Firm profitability. This study employed the Descriptive statistics analysis, Ordinal Logistic regression method and Multinomial Logistic regression method to estimate the regression models. Findings: The major contribution of this study is exploring the impact of Board composition and Ownership structure on the main three dividend policies such as Zero dividend policy, Irregular Dividend policy and Stable Dividend policy. Considering the overall model, the results revealed that Board size, Board meetings and Managerial ownership have a significant impact on the Firm’s Dividend policy. Then the parameter Estimates results are relative to the reference category of the Multinomial logistic regression. Under that Board Size, Managerial ownership and foreign ownership indicated a positive impact and Board meetings, Board independence and Institutional ownership indicated a negative impact on the Irregular dividend policy relative to the Zero dividend policy. On the other hand, Board size, Board Independence, Managerial ownership, and Institutional ownership indicated a positive impact and Board meetings, and foreign ownership indicated a negative impact on the Stable dividend policy relative to the Zero dividend policy. Originality: From the results of this study, practitioners can enhance their ability to make dividend decisions under the main three dividend policies.
The Impact of Corporate Social Responsibility on Firm’s Performance: Evidence from Textile and Apparel Manufacturing Companies in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Nuwarapaksha, N.E.D.; Chathurika, H.L.D.J.
Purpose: The purpose of this study is to determine the impact of Corporate Social Responsibility on firm’s performance of Apparel manufacturing companies in Sri Lanka. Design/Methodology/Approach: This study focused on how Corporate Social Responsibility like Economic Responsibility, Legal Responsibility, Ethical Responsibility, Philanthropic Responsibility are effect on the firm’s performance of apparel manufacturing companies in Sri Lanka. The research has used the quantitative approach to investigate the research and gathered data from 150 apparel manufacturing companies in Sri Lanka in order to achieve the research objectives. This research used a simple random sampling technique. In this study, the main source of data gathering approach is questionnaires. For data analysis, descriptive statistics, multicollinearity test, independent sample T-test, ANOVA test, and multiple regression were used, and SPSS statistical software has been to analyze the survey data. Findings: Based on the study's findings the hypotheses test demonstrates that the Economic Responsibility, Legal Responsibility, Ethical Responsibility, Philanthropic Responsibility are significantly impact to the firm’s performance of the apparel manufacturing companies in Sri Lanka. The study's adjusted R square is 51.9 percent, according to the multiple regression model, which indicates that the Corporate Social Responsibility elements in this study explain 51.9 percent of Corporate Social Responsibility on firm’s performance of apparel manufacturing companies in Sri Lanka. Apparel Manufacturing Companies are the major income source to the economy. Originality: According to the research findings, Corporate Social Responsibility has a bigger impact on performance of apparel manufacturing companies in Sri Lanka.
Impact of Investor Attention to the Covid-19 Crisis on Stock Returns; Evidence of Asian Stock Markets
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Sithumini, P.W.S.; Chathurika, H.L.D.J.
Introduction: Investor attention may impact stock prices, according to various theoretical and empirical research. This study examines the investor attention and response to the Covid-19 pandemic in the Asian stock market. Also, as the secondary objective, this research examines the negative impact of investors’ enhanced attention to COVID-19 on stock market returns is likely to be strong whether in countries with higher uncertainty avoidance culture or lower uncertainty avoidance culture. Design/Methodology/Approach: Ten Asian countries were selected from China, India, Pakistan, Bangladesh, Japan, South Korea, Sri Lanka, Indonesia, Singapore, and Vietnam. This research has used panel data analysis, descriptive statistics, correlation analysis, and regression analysis. Findings: According to this study’s findings, the investor attention has a negative relationship with the stock market returns. Conclusion: Overall, our findings have substantial implications for attention theory because they show that increased investor attention to an unfavorable shock, even if it originates in the health sector, results in poor financial market returns.
The Impact of off-Balance Sheet Activities on Bank Risks: Evidence from Licensed Commercial Banks of Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Sandamali, H.D.N.; Chathurika, H.L.D.J.
Introduction: Off-Balance Sheet activities (OBS) such as Guarantees and bonds, FX sales and purchases, acceptances, letter of credits, undrawn credit lines, underwriting facilities have become essential income sources for banks. The main objective of this study is to examine the impact of OBS activities on the bank risks of licensed commercial banks in Sri Lanka. Design/Methodology/Approach: The summation of OBS activities is the independent variable, and credit risk, market risk, liquidity risk, capital adequacy risk, leverage risk, and revenue growth risk are the dependent variables. Therefore, six different regressions are conducted. This study is based on secondary data and data were collected from eleven licensed commercial banks for the period 2011-2020. Findings: OBS activities impact on banking risks of licensed commercial banks in Sri Lanka. Further, OBS activities positively impact on liquidity risk, leverage risk and revenue growth risk. But OBS activities do not impact on credit risk, market risk and capital adequacy risk. Conclusion: It was concluded that OBS activities impact bank risks of licensed commercial banks in Sri Lanka. Thus, it is recommended for policymakers to develop appropriate strategies and policies to enhance the performance of the banks through dealing with OBS activities more to generate high income by giving their consideration to relevant risks.
Impact of Ownership Structure of Companies on Firm Financial Performance: A Comparative Study of Food Beverages and Tobacco Firms Listed in Colombo Stock Exchange in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Jayaranga, A.A.; Chathurika, H.L.D.J.
Introduction: Foreign direct investment (FDI) is an investment in controlling ownership of a business in one country by a firm operating in another country. This research has been conducted to identify any relationship between foreign direct investments and the firm financial performance of Food Beverages and Tobacco industry firms listed in the Colombo Stock exchange in Sri Lanka. Design/ Methodology/ Approach: The study sample consists of nineteen Food, Beverages and Tobacco companies listed in the Colombo Stock Exchange from 2015 to 2020. Ownership structure measured through the percentage of Non-Resident shareholdings was considered the independent variable, whereas the firm performance measured through return on equity was considered the dependent variable. Firm size, Financial Leverage, Sales Growth, and current ratio were used as the control variables. Descriptive analysis, Correlation analysis, and panel data regression were used to analyze the data in the study. Findings: The results revealed that the ownership structure of firms has an insignificant impact on firm performance. However, results indicate that firm size has a significant negative impact on ROE. But sales growth and financial leverage show a significant positive impact on the performance of listed Food, Beverage and Tobacco firms in Colombo Stock Exchange in Sri Lanka. Conclusion: The results of the study indicate that ownership concentration does not have a significant effect on firm performance of listed firms in the F&B sector in Sri Lanka.
Perceived Risk Factors Affecting Consumers’ Online Insurance Policy Purchase Behavior
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Weerasiri, R.A.U.I.; Chathurika, H.L.D.J.
Introduction: This paper examines the relationship between four factors of consumers’ perceived risk and consumers’ online life insurance policy purchase intentions. Design/Methodology/Approach: A questionnaire was used to collect data, and regression analysis was used to test the hypotheses. A total of 110 respondents have contributed to the survey, and data were quantitatively analysed via IBM SPSS Statistics 23. Findings: The findings suggest that consumers perceived risks when purchasing a life insurance policy online. All the four perceived risk factors have a significant negative influence on consumer online life insurance policy purchase intention. Conclusion: This research gives useful information to insurance companies in online activities and hopes that the findings of this study can help insurance companies to formulate strategies to reduce risks in online purchasing. The development of online shopping has led to some challenges. This issue appears because many insurance companies who do online activities do not understand the main factors contributing to consumers’ perceived risk. Studies on consumers’ perceived risks toward online life insurance policy purchase intentions are still inconclusive. Thus, this paper fills the gap in the research area.
Profitability of Technical Analysis vs. Buy and Hold Strategy: Evidence from Colombo Stock Exchange
(International Conference on Business and Information (ICBI – 2019), [Accounting, Finance and Economics], Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2019) Chathurika, H.L.D.J.; Kasunika, P.D.D.
This paper investigates the profitability of technical analysis in the Colombo Stock Exchange using fifteen companies listed in the S&P Sri Lanka 20 index. We tested the profitability of Variable-length Moving Average (VMA) technique against the buy and hold strategy by applying them to the prices of fifteen companies listed in the S & P Sri Lanka 20 index from 2000 to 2017. This study employs the Mann-Whitney U Statistic, a non-parametric test to evaluate the two strategies and identify whether the profitability of technical analysis is significantly different from buy and hold strategy. We find that, while delivering positive mean return to the investor, sell signals incorrectly predict the direction of share prices and majority of the spread is not statistically significant at least at 10% level to accept the predictability of VMA trading strategy. Thus, over the sample period from 2000 to 2017, no predictability of VMA trading technique is observed compared to the Buy and Hold Strategy. Further, it is not able to generate excess return after adjusting transaction costs under any of five trading rules. Hence, no profitability is observed compared to the Buy and Hold Strategy.
Systematic review of the market wide herding behavior in Asian region
(2022) Chathurika, H.L.D.J.; Tennekoon, S.T.M.S.
Traditional Finance theory presumed that equity market participants take decisions based on rationality. However, recent market incidents witnessed investors decision-making process is fueled with irrational behaviors like herding. Herd behavior is a dominated behavioral bias which depict investors take decisions based on imitating other investors behavior. Numerous studies can be identified in Herding based literacy in developed, emerging and frontier markets around the world. Thus,this study attempts to provide a review of theory and empirical evidence on market wide herding behavior in Asian region. As per the findings of the study, it can be observed that in India majority of studies have confirmed the non-existence of herding behavior. Half of the studies conducted in Pakistan confirm the existence of herding behavior while remainder confirm non-existence of herding behavior. Similar results were observed in Sri Lanka as well. However, majority of studies in Taiwan and Indonesia and all the studies of Vietnam have provided results for the existence of herding behavior. Thereby this study identifies several open issues for future research. Future studies that deal with time-series price data could employ empirical methodologies that allow for time-variation in parameter values. It is also important to know whether it is the same investors that herd over time, and why: are the reasons behind herding the same over time? Further, qualitative research needs to be conducted to identify the reasons behind the investor herding behavior.