Senavirathna, T.G.D.C.Deshapriya, N.P.R.2021-08-122021-08-12201122359877http://www.erepo.lib.uwu.ac.lk/bitstream/handle/123456789/6917/243-2011-Analyzing%20the%20Macroeconomic%20Determinants%20in%20Stock%20Market%20Development%20in%20Sri%20Lanka.pdf?sequence=1&isAllowed=yNote: See the PDF Version Businesses use diverse types of methods to meet their financial needs. They can mainly be divided into capital market and money market. Capital market provides them long term capital while money market provides short term financial requirements. Among them, stock market is the place where secondary shares are issued to fulfill the capital requirements in public companies and make opportunities for investors to obtain benefits from their investments. In Sri Lanka, these transactions occur in Colombo Stock Exchange. In generally, stock market development indicates a developing industrial sector and a growing economy of a country. According to the traditional theoretical arguments, stock market development depends on macro-economic factors in both developed and emerging stock markets. Especially after the civil war in Sri Lanka, stock market has been playing a major role in the Sri Lankan economy. As a result, Colombo Stock Exchange completed its best year in the history in 2009 overcoming the challenges experienced in 2007 and 2008. This performance of the Colombo Stock Exchange during the year 2009 made it the best performing stock market among the 52 markets beating Mongolia and Bangladesh markets (According to Bloomberg News). Within this scenario, this research was conducted to identify macro-economic determinants of growth of stock market as the primary objective while assessing the effect of Exchange rate policy on market capitalization and assessing the effect of war on market capitalization in stock market as secondary objectives. This paper is an effort to quantify the above problem descriptively and econometricallyenMarketingManagementFinancial ManagementEngineeringOther