Opportunities and challenges faced by the Sri Lankan construction companies in the stock market

Abstract

In recent years, the social and technological changes originating from globalization, information revolution and knowledge-based economy fundamentally modified the construction industry environment. Local contractors need to originate a strategy to upgrade not only its technological capacity, but also the financial capacity to compete successfully in this landscape. Access to capital is one of the key strategic asset which contributes to the success of construction firms. This research focuses on to determine suitability of financing through the Stock Market for construction companies. Survey approach was used to collect data. Mainly questionnaire was designed to identify the opportunities and challenges in the Stock Market for a construction company. Semi structured interviews were conducted to identify the strategies to enhance opportunities and face challenges in Stock Market. Preliminary survey was carried to structure the questionnaire. The data gathered related to the challenges were analysed using SPSS one sample t-test and IPA matrix. Simple graphical analysis methods and manual content analysis technique also were used to analyse data. A total number of 22 opportunities related to the Stock Market for a construction company were identified during the questionnaire survey and semi-structured interviews. Then identified the 17 challenges related to the Stock Market for a construction company. However, just only 4 number of challenges were identified as critical challenges. Mechanisms available to enhance opportunities and to face challenges in the Stock Market were investigated. Finally, identified that financing through Stock Market is a better opportunity for the construction companies in Sri Lanka.