| Title : | Factors affecting share prices on banking and non-banking enterprises: a case of Nepal | | Material Type: | printed text | | Authors: | Suman K.C, Author | | Publication Date: | 2016 | | Pagination: | 100p. | | Size: | GRP/Thesis | | Accompanying material: | 5/B | | General note: | Including bibilography | | Languages : | English | | Descriptors: | Banks
Banks and banking
Share-Price
| | Keywords: | 'equality share share price equality share prices' | | Class number: | 332.632 | | Abstract: | The stock market plays a pivotal role in the growth of the industry and commerce of the country that eventually affects the economy of the country to a great extent (Fama and French, 1995).Identification of the factors shaping the share prices is crucial for the corporate managers and it is even more crucial in banking sectors especially in case of Nepal because most of the investors in the capital market invest in the shares of the banks. So, the empirical relationship between share prices and its determinants are stated as the research questions followed by the development of the hypotheses. The major objective of this study is to analyze the factors affecting the share prices of the banks and non-banks along with the examination of empirical relationship between them. To analyze the structure and pattern of market price per share, price earnings ratio, dividend per share, earnings per share, price earnings ratio, return on equity, investment opportunities, leverage, total assets and cash flows and to find out the similarities and dissimilarities of the stock price between banking and non-banking enterprises.
The review of literatures has shown relationship between various factors such as earnings per share, profitability, investment opportunities, leverage, size, liquidity, dividend per share, price earning etc. There may be other factors such as demand and supply conditions which can be influenced by the performance of the company, the performance of the industry and the other players in the industry (Alshubiri, 2010). In addition, profitability, earnings per share, investment opportunities, leverage, size and liquidity are some of the variables that are found to have significant association with share prices in various context. Based on the reviews, this study has proposed the conceptual framework identifying earnings per share, profitability, investment opportunities, leverage, size and liquidity as the most important factors affecting the share prices of banks and non-banks enterprises.
For the purpose of the study 14 banks and 18 listed non-banks divided are taken as sample and required data such as market price per share, price earnings ratio and the independent variables are collected from official website of concern organization, Nepal Stock Exchange Limited (NEPSE), Security Board of Nepal (SEBON), Nepal Rastra Bank (NRB) and annual reports from respective organizations. This study collected data of sampled organizations at least for five years to ten years. (i.e. 2003/04 to 2012/13). The data were extracted from balance sheet, income statement, cash flow statement of respective organizations. Earnings per share, total assets, leverage, profitability, liquidity dividend per share and investment opportunities has been used as independent variables where as market price per share and price earnings ratio used as dependent variables. Stratified sampling method is used to select the sample of banks and non bank’s. Descriptive statistics and correlation analysis has been used as method of analysis along with different statistical test of significance for validation of model such as t-test, F-test, direction of autocorrelation and multi-colinearity and stepwise linear regression analysis.
After the data analysis, earning per share, profitability, investment opportunities and dividend per share are the major determinants of stock price of banking and non -banking group. Investment opportunities, total debt to total assets and cash flows are the major determinants of price earnings ratio of banking and non- banking group. The relationship of market price per share with size, liquidity, price earnings ratios and leverage was found to have same result for determining market price per share of banks, non- banks and total sample selected. Dividend per share, earnings per share, profitability, investment opportunities, size and liquidity found to have positive relationship with market price per share. Price earnings ratio have positive relationship with dividend per share, earnings per share, profitability ,size and liquidity however it has negative relationship with total debt to total assets.
The report also investigates the fact that the analysis conducted has limitations. Finance companies and development banks has not been used in study, only 14 commercial banks and 18 non-banks has been used as sample due to availability of data and the study has assumed the linear relationship between dependent and independent variables. |
Factors affecting share prices on banking and non-banking enterprises: a case of Nepal [printed text] / Suman K.C, Author . - 2016 . - 100p. ; GRP/Thesis + 5/B. Including bibilography Languages : English | Descriptors: | Banks
Banks and banking
Share-Price
| | Keywords: | 'equality share share price equality share prices' | | Class number: | 332.632 | | Abstract: | The stock market plays a pivotal role in the growth of the industry and commerce of the country that eventually affects the economy of the country to a great extent (Fama and French, 1995).Identification of the factors shaping the share prices is crucial for the corporate managers and it is even more crucial in banking sectors especially in case of Nepal because most of the investors in the capital market invest in the shares of the banks. So, the empirical relationship between share prices and its determinants are stated as the research questions followed by the development of the hypotheses. The major objective of this study is to analyze the factors affecting the share prices of the banks and non-banks along with the examination of empirical relationship between them. To analyze the structure and pattern of market price per share, price earnings ratio, dividend per share, earnings per share, price earnings ratio, return on equity, investment opportunities, leverage, total assets and cash flows and to find out the similarities and dissimilarities of the stock price between banking and non-banking enterprises.
The review of literatures has shown relationship between various factors such as earnings per share, profitability, investment opportunities, leverage, size, liquidity, dividend per share, price earning etc. There may be other factors such as demand and supply conditions which can be influenced by the performance of the company, the performance of the industry and the other players in the industry (Alshubiri, 2010). In addition, profitability, earnings per share, investment opportunities, leverage, size and liquidity are some of the variables that are found to have significant association with share prices in various context. Based on the reviews, this study has proposed the conceptual framework identifying earnings per share, profitability, investment opportunities, leverage, size and liquidity as the most important factors affecting the share prices of banks and non-banks enterprises.
For the purpose of the study 14 banks and 18 listed non-banks divided are taken as sample and required data such as market price per share, price earnings ratio and the independent variables are collected from official website of concern organization, Nepal Stock Exchange Limited (NEPSE), Security Board of Nepal (SEBON), Nepal Rastra Bank (NRB) and annual reports from respective organizations. This study collected data of sampled organizations at least for five years to ten years. (i.e. 2003/04 to 2012/13). The data were extracted from balance sheet, income statement, cash flow statement of respective organizations. Earnings per share, total assets, leverage, profitability, liquidity dividend per share and investment opportunities has been used as independent variables where as market price per share and price earnings ratio used as dependent variables. Stratified sampling method is used to select the sample of banks and non bank’s. Descriptive statistics and correlation analysis has been used as method of analysis along with different statistical test of significance for validation of model such as t-test, F-test, direction of autocorrelation and multi-colinearity and stepwise linear regression analysis.
After the data analysis, earning per share, profitability, investment opportunities and dividend per share are the major determinants of stock price of banking and non -banking group. Investment opportunities, total debt to total assets and cash flows are the major determinants of price earnings ratio of banking and non- banking group. The relationship of market price per share with size, liquidity, price earnings ratios and leverage was found to have same result for determining market price per share of banks, non- banks and total sample selected. Dividend per share, earnings per share, profitability, investment opportunities, size and liquidity found to have positive relationship with market price per share. Price earnings ratio have positive relationship with dividend per share, earnings per share, profitability ,size and liquidity however it has negative relationship with total debt to total assets.
The report also investigates the fact that the analysis conducted has limitations. Finance companies and development banks has not been used in study, only 14 commercial banks and 18 non-banks has been used as sample due to availability of data and the study has assumed the linear relationship between dependent and independent variables. |
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