FACTORS AFFECTING STOCK PRICE OF LIFE INSURANCE COMPANIES IN NEPAL

Abstract

The study aimed to determine the factors affecting the market share prices of three life insurance companies listed on the Nepal Stock Exchange (NEPSE): Asian Life Insurance Company (ALICL), Nepal Life Insurance Company (NLIC), and Life Insurance Corporation Nepal (LICN). The research used a descriptive analytical design and convenience sampling to select these companies. Five variables were examined: Earnings Per Share (EPS), Price-to-Earnings Ratio (P/E ratio), Dividend Yield Ratio (D/Y ratio), and Book Value Per Share (BVPS) as independent variables, while Market Price Per Share (MPPS) was the dependent variable. The study applied Mean Test, Standard Deviation, Ttest, and Regression Test for analysis. The results showed that there were no significant differences in market prices of the insurance companies based on any of the independent variables. Additionally, most independent variables had a strong positive correlation with market share prices, except for the P/E ratio, which had a strong negative relationship with MPPS. Regression analysis indicated that the P/E ratio was the most important predictor and had a significant relationship with the market price per share compared to the other independent variables