Weak form Efficiency of the Sri Lankan Stock Market From 2010 -2014

Abstract

With the ending of thirty years civil war, Sri Lankan Colombo Stock Exchange recorded its highest market capitalization and trading volume ever since (Fernando , 2012). Colombo stock market applied new advanced technology for its day to day operation in last decade (www.cse.lk). Resulting, both level of performance and level of investment in Share Market were increased, however the process was further accelerated after post war period (Kenangasl Research Company, 2011). With that improvement, the number of investors who were willing to invest in Colombo Stock Exchange was increased and tried to reap maximum from the market. That cold competition beckon an efficiency problem in share market. Hence the study focused to investigate weak form efficiency of the Colombo Stock Exchange. The study is a quantitative type time cerise study. The data were collected on All Share Price Index from January 2010 to December 2014. Finally through all the analysis it was found that stock price do not follow random walk, which supports to the conclusion that Colombo Stock Exchange is weak form inefficient.