| Title : | Effect of firm specific and macroeconomic varibles on market price of shares and financial performance in commercial banks of Nepal | | Material Type: | printed text | | Authors: | Suas Amatya, Author | | Publication Date: | 2016 | | Pagination: | 78p. | | Size: | GRP/Thesis | | Accompanying material: | 5/B | | General note: | Including bibilography | | Languages : | English | | Descriptors: | Bank loans
Banks
Banks and banking
Firm specific
Macroeconomics
Share-Price
| | Keywords: | 'return on assets return on equity market price per share earning per share gross domestic product banks' | | Class number: | 332.632 | | Abstract: | The banking sector has been undergoing a complex, but comprehensive phase of restructuring since 1991, with a view to make it sound, efficient, and at the same time it is forging its links firmly with the real sector for promotion of savings, investment and growth. The study examines the determinants of bank profitability in Nepal. These determinants have been categorized into internal factors which are bank-specific characteristics and external factors which are macroeconomic factors. Many studies have been undertaken to study on factors affecting the share price in development countries but in Nepal there are few studies which have been conducted on this issue. This study investigates the relationship between share price, bank specific and micro-economic variables of selected Nepalese commercial banks. The stock price in the market is not static rather it changes every day. The most obvious factor that influence are demand and supply factors. The price of any commodity is affected by both micro-economic and macro-economic factors.
The main objective of the study is to determine the effects of firm specific and macroeconomic variables on bank performance and share price in Nepalese commercial banks and to make recommendations for management decision making and policy objectives. A panel data of 14 commercial banks in Nepal was analyzed over a period of 2003-2013, using a generalized least squares technique to estimate fixed effect regression models. Two key measures of profitability (dependent variables) analysed in this study comprised of Return on Asset (ROA), Return on Equity (ROE) and a measure of share price market price per share (MPS). Bank-specific factors, which were incorporated into the regression models were capital adequacy ratio, assets quality ratio, dividend per share and firm size. In addition, macroeconomic factors captured in the regression models included inflation, Gross Domestic Products growth rate (GDP).
The results for the ROA model indicate that capital adequacy, firm size, and dividend per share were positively related to bank profitability while asset quality is negatively significant to bank profitability. Moreover, inflation and GDP were positively significant to bank profitability in case of ROA. Similarly, the results for the ROE model indicate that capital adequacy, firm size, and dividend per sharewere positively related to bank profitability while asset quality is negatively correlated to bank profitability. Moreover, inflation and GDP were positively related to bank profitability.The results for the MPS model indicate that capital adequacy, firm size,and dividend per sharewere positively related to share price while asset quality is negatively correlated to share price. Moreover, inflation and GDP growth rate was positively correlated to share price.
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Effect of firm specific and macroeconomic varibles on market price of shares and financial performance in commercial banks of Nepal [printed text] / Suas Amatya, Author . - 2016 . - 78p. ; GRP/Thesis + 5/B. Including bibilography Languages : English | Descriptors: | Bank loans
Banks
Banks and banking
Firm specific
Macroeconomics
Share-Price
| | Keywords: | 'return on assets return on equity market price per share earning per share gross domestic product banks' | | Class number: | 332.632 | | Abstract: | The banking sector has been undergoing a complex, but comprehensive phase of restructuring since 1991, with a view to make it sound, efficient, and at the same time it is forging its links firmly with the real sector for promotion of savings, investment and growth. The study examines the determinants of bank profitability in Nepal. These determinants have been categorized into internal factors which are bank-specific characteristics and external factors which are macroeconomic factors. Many studies have been undertaken to study on factors affecting the share price in development countries but in Nepal there are few studies which have been conducted on this issue. This study investigates the relationship between share price, bank specific and micro-economic variables of selected Nepalese commercial banks. The stock price in the market is not static rather it changes every day. The most obvious factor that influence are demand and supply factors. The price of any commodity is affected by both micro-economic and macro-economic factors.
The main objective of the study is to determine the effects of firm specific and macroeconomic variables on bank performance and share price in Nepalese commercial banks and to make recommendations for management decision making and policy objectives. A panel data of 14 commercial banks in Nepal was analyzed over a period of 2003-2013, using a generalized least squares technique to estimate fixed effect regression models. Two key measures of profitability (dependent variables) analysed in this study comprised of Return on Asset (ROA), Return on Equity (ROE) and a measure of share price market price per share (MPS). Bank-specific factors, which were incorporated into the regression models were capital adequacy ratio, assets quality ratio, dividend per share and firm size. In addition, macroeconomic factors captured in the regression models included inflation, Gross Domestic Products growth rate (GDP).
The results for the ROA model indicate that capital adequacy, firm size, and dividend per share were positively related to bank profitability while asset quality is negatively significant to bank profitability. Moreover, inflation and GDP were positively significant to bank profitability in case of ROA. Similarly, the results for the ROE model indicate that capital adequacy, firm size, and dividend per sharewere positively related to bank profitability while asset quality is negatively correlated to bank profitability. Moreover, inflation and GDP were positively related to bank profitability.The results for the MPS model indicate that capital adequacy, firm size,and dividend per sharewere positively related to share price while asset quality is negatively correlated to share price. Moreover, inflation and GDP growth rate was positively correlated to share price.
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