| Author | Perera, Wendy Michele Forbes |
| Call Number | AIT RSPR no.SM-94-30 |
| Subject(s) | Stock-exchange--Sri Lanka
|
| Note | A Research Study submitted in partial fulfillment for the degree of Master of Business
Administration |
| Publisher | Asian Institute of Technology |
| Abstract | Securities market development is of paramount importance to the development of a countries economy. With increasing emphasis on internationalization, institutionalization and globalization most developing countries are placing importance on their stock market development as this sector of the financial sector has lagged behind in most emerging markets. Technology's role in stock market development includes developing the capabilities to deliver the products at the lowest possible cost. Technology in stock markets mainly includes sophisticated computerization and telecommunication facilities. Computerization has revolutionized the world stock exchanges from trading floor trading to screen based trading and scripless settlement. This paper gives wide coverage to the securities market industry in general, and in particular to the Sri Lankan market which is one of the fastest growing markets today in Asia with increased foreign investment. The intention of this research was to explore the efficiency of the Sri Lankan market in the context of operational, pricing, and information processing efficiency. In an operationally efficient market investors can obtain transaction services as cheaply as possible. Pricing efficiency refers to a market which fully integrates all available information that is relevant to the valuation of securities. Information efficiency refers to a situation where all investors have equal opportunity to market information and no one individual is at an advantage over others. Using the serial correlation test the Sri Lankan market was tested for the weak form of efficiency hypothesis. Having tested the hypothesis for 20 listed companies with substantial market capitalization the results proved that the market is inefficient as the correlation was positive. Thus it proved that the market was inefficient in terms of pricing and information efficiency. A questionnaire was developed for the SEC, CSE, Member firms and Unit trusts: The results of the questionnaire were analyzed and the qualitative results proved that the market is operationally efficient and that speculation and manipulation which presently exists could be controlled by stricter regulation, better dissemination of information and investor education. The laws and regulations are existent but they need to be implemented properly. In view of the shortcomings a securities market policy is recommended to the Government, Central Bank, SEC, CSE, Member firms, Institutional investors, and Retail investors for a more fair, efficient and stable market through better investor protection and information disclosure, provision of securities market services, prudential regulation and supervision for clearing and settlement. |
| Year | 1994 |
| Type | Research Study Project Report (RSPR) |
| School | School of Management (SOM) |
| Department | Other Field of Studies (No Department) |
| Academic Program/FoS | Master of Business Administration (MBA) (Publication code=SM) |
| Chairperson(s) | Gupta, Jyoti P.; |
| Examination Committee(s) | Swierczek, F.W.;Igel, Barbara; |
| Scholarship Donor(s) | Norwegian Government; |
| Degree | Research Studies Project Report (M.B.A.) - Asian Institute of Technology, 1994 |