| Title : | Impact of fundamentals factors on stock price: case of selected commercial banks of Nepal | | Material Type: | printed text | | Authors: | Laxmi Paudel, Author | | Publication Date: | 2016 | | Pagination: | 71p. | | Size: | GRP/Thesis | | Accompanying material: | 5/B | | General note: | Including bibilography | | Languages : | English | | Descriptors: | Banks
Banks and banking
Commercial banks
Nepal
Stocks
Stocks-Prices
| | Keywords: | 'equality share share price equality share prices return on assets return on equity' | | Class number: | 332.632 | | Abstract: | Fundamental factor is the ratio of financial and market ratios. Demand and supply forces are associated with changes in fundamental factors that are relevant for share price valuation like earnings per share, dividend per share, payout ratio, size of the firm and its growth. Suresh (2013) explained that fundamental analysis is a study to learn any related factors that can affect the security’s value, including individual specific factors and macroeconomic factors. The market price of a share is a key factor that influences investment decision of stock market investors. The share price is one of the most important indicators available to the investors for their decision to invest in or not a particular share (Gill & Mathur, 2012). Financial market plays a crucial role in mobilization or a constant flow of saving and changing these financial resources for expanding productive capacity in the countries. The key function of the stock market is to provide an exchange in which buyers and sellers interact for the purpose of trading in shares and other securities issued by publicly traded companies (Monther & Kaothar, 2010). Stock market is important in country’s economic development as well as the investor’s point of view. Hence it is necessary to analyze the basic factors of stock market which might influence the investor to invest their amount in the equity share prices. Investment in equity share is one of the most liquid forms of investment.
The main purpose of the study is to examine the impact of fundamental factors on stock price of Nepalese commercial banks. However, the specific objectives of the study are as follows: a) To determine the structure and pattern of earning per share, dividend per share, return on assets, return on equity, net profit margin and stock price, b) To find out the relation of earning per share, dividend per share and return on assets with stock price of Nepalese commercial banks, c) To investigate the impact of return on equity and net profit margin on stock market and d) To identify the most important variable affecting stock price of Nepalese commercial banks.
The study is based on descriptive and causal-comparative research designs. The descriptive research design has been adopted for fact-finding and searching for adequate information about the fundamental issues associated with variables affecting stock price of Nepalese commercial banks. It describes the real and actual condition, situation and facts. Hence, the research design adopted in this study is of descriptive type.
The study also establishes the cause and effect relationship between selected fundamental factor and stock price of commercial banks in Nepalese context. More specifically, the study analyzes the impact of return on assets, return on equity, net profit margin, dividend per share and earning per share on stock price of the Nepalese commercial banks during 2007 to 2014.
The average market price per share and change in market price per share is highest for SCBL. Average net profit margin is highest for NCC. NBB has highest return on equity and average return on assets. The earning per share is highest for EBL. NABIL has highest average dividend per share. The result shows positive beta coefficient for earning per share, return on assets and dividend per share. This indicates that higher the earning per share, higher would be the market price per share. Likewise, positive beta coefficient for dividend per share postulates that higher the dividend per share, higher would be the market price per share. The study also revealed that the beta coefficient for return on assets is positive with market price per share. This indicates that higher the return on assets higher would be the market price per share. The result shows positive beta coefficients for earning per share, return on assets, dividend per share and return on equity. This indicates that higher the earning per share, higher would be the change in market price per share. Likewise, positive beta coefficient for dividend per share postulates that higher the dividend per share, higher would be the change in market price per share. The study also revealed that the beta coefficient for return on assets is positive with change in market price per share. This indicates that higher the return on assets higher would be the change in market price per share. |
Impact of fundamentals factors on stock price: case of selected commercial banks of Nepal [printed text] / Laxmi Paudel, Author . - 2016 . - 71p. ; GRP/Thesis + 5/B. Including bibilography Languages : English | Descriptors: | Banks
Banks and banking
Commercial banks
Nepal
Stocks
Stocks-Prices
| | Keywords: | 'equality share share price equality share prices return on assets return on equity' | | Class number: | 332.632 | | Abstract: | Fundamental factor is the ratio of financial and market ratios. Demand and supply forces are associated with changes in fundamental factors that are relevant for share price valuation like earnings per share, dividend per share, payout ratio, size of the firm and its growth. Suresh (2013) explained that fundamental analysis is a study to learn any related factors that can affect the security’s value, including individual specific factors and macroeconomic factors. The market price of a share is a key factor that influences investment decision of stock market investors. The share price is one of the most important indicators available to the investors for their decision to invest in or not a particular share (Gill & Mathur, 2012). Financial market plays a crucial role in mobilization or a constant flow of saving and changing these financial resources for expanding productive capacity in the countries. The key function of the stock market is to provide an exchange in which buyers and sellers interact for the purpose of trading in shares and other securities issued by publicly traded companies (Monther & Kaothar, 2010). Stock market is important in country’s economic development as well as the investor’s point of view. Hence it is necessary to analyze the basic factors of stock market which might influence the investor to invest their amount in the equity share prices. Investment in equity share is one of the most liquid forms of investment.
The main purpose of the study is to examine the impact of fundamental factors on stock price of Nepalese commercial banks. However, the specific objectives of the study are as follows: a) To determine the structure and pattern of earning per share, dividend per share, return on assets, return on equity, net profit margin and stock price, b) To find out the relation of earning per share, dividend per share and return on assets with stock price of Nepalese commercial banks, c) To investigate the impact of return on equity and net profit margin on stock market and d) To identify the most important variable affecting stock price of Nepalese commercial banks.
The study is based on descriptive and causal-comparative research designs. The descriptive research design has been adopted for fact-finding and searching for adequate information about the fundamental issues associated with variables affecting stock price of Nepalese commercial banks. It describes the real and actual condition, situation and facts. Hence, the research design adopted in this study is of descriptive type.
The study also establishes the cause and effect relationship between selected fundamental factor and stock price of commercial banks in Nepalese context. More specifically, the study analyzes the impact of return on assets, return on equity, net profit margin, dividend per share and earning per share on stock price of the Nepalese commercial banks during 2007 to 2014.
The average market price per share and change in market price per share is highest for SCBL. Average net profit margin is highest for NCC. NBB has highest return on equity and average return on assets. The earning per share is highest for EBL. NABIL has highest average dividend per share. The result shows positive beta coefficient for earning per share, return on assets and dividend per share. This indicates that higher the earning per share, higher would be the market price per share. Likewise, positive beta coefficient for dividend per share postulates that higher the dividend per share, higher would be the market price per share. The study also revealed that the beta coefficient for return on assets is positive with market price per share. This indicates that higher the return on assets higher would be the market price per share. The result shows positive beta coefficients for earning per share, return on assets, dividend per share and return on equity. This indicates that higher the earning per share, higher would be the change in market price per share. Likewise, positive beta coefficient for dividend per share postulates that higher the dividend per share, higher would be the change in market price per share. The study also revealed that the beta coefficient for return on assets is positive with change in market price per share. This indicates that higher the return on assets higher would be the change in market price per share. |
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