| Title : | Firm specific and macroeconomic determinants in stock price : evidence from Nepalese commercial bank | | Material Type: | printed text | | Authors: | Jyoti Malla, Author | | Publication Date: | 2015 | | Pagination: | 78p. | | Size: | GRP/Thesis | | Accompanying material: | 5/B | | General note: | Including bibilography | | Languages : | English | | Descriptors: | Banks
Banks and banking
Commercial banks
Firm specific
Macroeconomics
Share-Price
| | Keywords: | 'equality share share price equality share prices return on assets return on equity' | | Class number: | 332.632 | | Abstract: | Share price has received much attention in academic literature. There is far less research on the empirical side. All the empirical work investigating relationship between share price, bank specific and macroeconomic variables has focused developed economy. This study investigates the relationship between share price, bank specific and macroeconomic variables of selected Nepalese commercial banks. The stock price in the market is not static rather it changes every day. The most obvious factors that influence are demand and supply factors. The price of any commodity is affected by both micro-economic and macro-economic factors.
This study basically aimed at examines the empirical relationship between the stock prices, firm specific variables, and macroeconomic factors. The specific objectives of the study are: (a) to explore the effect of firm specific variables such as size measured by total assets, earning per share, and return on assets of the commercial banks on their stock prices, (b) to identify the effect of macroeconomic variables namely gross domestic product (GDP) and inflation on common stock prices of banks, (c) to investigate the most influencing factors to explain the prices of the stock of Nepalese commercial banks, (d) to provide the suggestions based on the research findings. This study is basically based on the analysis of secondary data. The data for firm specific variables including stock market data have been obtained from financial statements of the sample firms recorded in the database of Nepal Stock Exchange (NEPSE) Limited and Securities Board of Nepal (SEBON) provided in their respective websites. NEPSE and SEBON have maintained the record of firm specific financial data from the fiscal year 2002 to 2013 in their respective database in websites. The annual data series on macroeconomic variables such as inflation and interest rate have been obtained from websites of IMF. The data relating to GDP and inflation has been obtained from the fiscal year 2002 to 2013price. For analyzing the relationship, market share price is used as a dependent variable and SIZE, EPS, ROA, GDP, Inflation and MS is used as an independent variable. Besides, the study also used descriptive statistics to analyze the views of the financial executives, which mainly focus on the qualitative part of the major aspect of the market price share.
The result of the study showed that joint ventures have higher market share price than non-joint ventures. The major conclusion of this study is the firm specific variable like Size, EPS, ROA and macroeconomic variable gross domestic product, inflation and money supply has a dominant impact on the stock price determination in Nepalese enterprises. Size had positive and significant relationship in MPS of commercial banks. To sum up, the main implication of this study is that money supply is the predominant factor that determines the market share prices of commercial bank in Nepal. Other extraneous factors also caused market share price to fluctuate. Therefore, investors must look after all factors, which explicitly of implicitly affect market share price so that they can arrive at rational decision. Finally, Nepalese bankers and policy makers should also pay adequate attention to analyze the factors that make variation in the market share price of the commercial bank. |
Firm specific and macroeconomic determinants in stock price : evidence from Nepalese commercial bank [printed text] / Jyoti Malla, Author . - 2015 . - 78p. ; GRP/Thesis + 5/B. Including bibilography Languages : English | Descriptors: | Banks
Banks and banking
Commercial banks
Firm specific
Macroeconomics
Share-Price
| | Keywords: | 'equality share share price equality share prices return on assets return on equity' | | Class number: | 332.632 | | Abstract: | Share price has received much attention in academic literature. There is far less research on the empirical side. All the empirical work investigating relationship between share price, bank specific and macroeconomic variables has focused developed economy. This study investigates the relationship between share price, bank specific and macroeconomic variables of selected Nepalese commercial banks. The stock price in the market is not static rather it changes every day. The most obvious factors that influence are demand and supply factors. The price of any commodity is affected by both micro-economic and macro-economic factors.
This study basically aimed at examines the empirical relationship between the stock prices, firm specific variables, and macroeconomic factors. The specific objectives of the study are: (a) to explore the effect of firm specific variables such as size measured by total assets, earning per share, and return on assets of the commercial banks on their stock prices, (b) to identify the effect of macroeconomic variables namely gross domestic product (GDP) and inflation on common stock prices of banks, (c) to investigate the most influencing factors to explain the prices of the stock of Nepalese commercial banks, (d) to provide the suggestions based on the research findings. This study is basically based on the analysis of secondary data. The data for firm specific variables including stock market data have been obtained from financial statements of the sample firms recorded in the database of Nepal Stock Exchange (NEPSE) Limited and Securities Board of Nepal (SEBON) provided in their respective websites. NEPSE and SEBON have maintained the record of firm specific financial data from the fiscal year 2002 to 2013 in their respective database in websites. The annual data series on macroeconomic variables such as inflation and interest rate have been obtained from websites of IMF. The data relating to GDP and inflation has been obtained from the fiscal year 2002 to 2013price. For analyzing the relationship, market share price is used as a dependent variable and SIZE, EPS, ROA, GDP, Inflation and MS is used as an independent variable. Besides, the study also used descriptive statistics to analyze the views of the financial executives, which mainly focus on the qualitative part of the major aspect of the market price share.
The result of the study showed that joint ventures have higher market share price than non-joint ventures. The major conclusion of this study is the firm specific variable like Size, EPS, ROA and macroeconomic variable gross domestic product, inflation and money supply has a dominant impact on the stock price determination in Nepalese enterprises. Size had positive and significant relationship in MPS of commercial banks. To sum up, the main implication of this study is that money supply is the predominant factor that determines the market share prices of commercial bank in Nepal. Other extraneous factors also caused market share price to fluctuate. Therefore, investors must look after all factors, which explicitly of implicitly affect market share price so that they can arrive at rational decision. Finally, Nepalese bankers and policy makers should also pay adequate attention to analyze the factors that make variation in the market share price of the commercial bank. |
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