DETERMINANTS OF THE STOCK PRICE OF NEPALESE COMMERCIAL BANKS

Abstract

Stock market is a mechanism through which corporate sectors collect funds to finance productive projects by issuing securities. The equities market is now a necessary one, contributing significantly to economic growth and prosperity by encouraging capital formation. They have the greatest significance for economic growth because they guarantee the flow of resources to the most advantageous investment opportunity. Therefore, this study identifies and analyze the determinants of stock price of Nepalese commercial banks. The prime objective of the studied the Determinants of stock price of Nepalese Commercial banks. Market Per Share (MPS) is dependent variables whereas earnings per share (EPS), dividend per share (DPS), Price earnings ratio (P/E ratio), and book value per share (BVPS) are the independent variables. This research is based on descriptive and causal-comparative research design and the data were collected from books, articles, journals, internet and annual reports of selected banks. Based on the information that is currently available, a mere six out of twenty commercial banks namely, Everest Bank Limited, Himalayan Bank Limited, Nepal Bank Limited, Nepal SBI Bank Limited, Siddhartha Bank Limited, and Agriculture Development Bank Limited have been chosen for research purposes. This study is based on secondary data and covers ten fiscal years from 2012/2013 to 2021/2022. The focus of the study is Nepal's commercial banks. The regression models have been to test the determinants of stock price of Nepalese commercial banks. The result showed that beta coefficient for earnings per share, dividend per share, price earnings ratio and book value per share are positive on market price per share. Key word: Earnings per share, Dividend per share, P/E ratio, Book value per share and Market price per share.