DETERMINANTS OF SHARE PRICE OF NEPALESE COMMERCIAL BANKS

Abstract

This study is conducted to analyze the Determinants of Share Price of Nepalese Commercial Banks. The study variables used in this study are earnings per share (EPS), dividend per share (DPS), price earnings ratio (PER) and book value per share (BVPS), Inflaction (INF), Gross Domestic Product (GDP) and Market Price per Share (MPS). To analyze the data a combination of descriptive research design and casual comparative research design has been used in this study. This study considered only five commercial banks Nabil Bank Limited (NABIL), Himalayan Bank Limited (HBL), Nepal SBI Bank Limited (NSBI), Global IME Bank Limited (GBL), NMB Bank Limited (NMB) as sample banks. This study is totally based on secondary data which are collected from the annual reports of sample banks from year 2013/14 to 2022/23 covering recent ten year’s data. The relationship of market price per share of commercial banks in Nepal taking the independent variables banks in this study conclude that that market price per share is positively correlated with earnings per share, dividend per share, book value per share and price earnings ratio of the banks while relationship between inflation and MPS is -0.727 showing high degree of negative correlation and the relationship between MPS and GDP is 0.495 showing less degree of positive correlation in the banks. The effect of earnings per share, dividend per share, price earnings ratio and book value per share, Inflaction, Gross Domestic Product and Market Price per Share using the multiple regression analysis in this study. Conclude that earnings per share, dividend per share, price earnings ratio and book value per share, Inflaction, Gross Domestic Product are the major factors affecting the market price per share of the banks. On the other hand, it is concluded that, The study cannot conclude that any single factor plays a more vital role to fix the price of share of Nepalese commercial banks. All the factors have significance in the price determination of share context to determinants of share price of nepalese commercial banks .