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Does Value Strategy Outperform the Growth Strategy in Colombo Stock Exchange? (Special Reference to War Effected Market 2000-2018)

Authors:

H. J. R. Buddhika ,

University of Kelaniya, LK
About H. J. R.
Department of Finance, Faculty of Commerce and Management Studies
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P. N. D. Fernando

University of Kelaniya, LK
About P. N. D.
Department of Finance
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Abstract

The study focused on whether value stocks outperform the growth stocks taking evidence from listed companies in Colombo Stock Exchange and to identify whether there is a structural break with the end of the thirty-year war prevailed in Sri Lanka. The scholars considered value and growth agreement in developed capital markets, has concluded with contradictory results and the attention towards frontier markets such as Sri Lanka is poor. Current strategy incorporates Wilcoxon Rank Test and Chow Test for daily data for the period from 2000 to 2018 supported by previous scholars. The study found the growth portfolios were given higher returns in the war period. The results reveal the post-war period; the value portfolio returns outperform growth portfolio returns (2009-2018). Further, no structural break was detected during the period.
How to Cite: Buddhika, H.J.R. and Fernando, P.N.D., 2020. Does Value Strategy Outperform the Growth Strategy in Colombo Stock Exchange? (Special Reference to War Effected Market 2000-2018). Sri Lanka Journal of Economic Research, 8(1), pp.101–111. DOI: http://doi.org/10.4038/sljer.v8i1.126
Published on 31 Dec 2020.
Peer Reviewed

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