Determinants of stock price in Nepal stock exchange with special focus to commerical banks

Abstract

Security market is the backbone of strong economy. Even though this is a vast area of study, the researcher has tried to explore the factors affecting stock of private commercial banks by correlation and regression analysis (secondary data) and non-parametric test using 5-degree Likert-Type Scale (primary data).and tried to give some information to all the relevant person as well as organization. Most of the private commercial banks (which fall in Group ‘A’ of NEPSE listed companies);analyzing their history of lastsevenyears (2000/01to 2006/07) has not been showing consistent pricing performances. The share price in NEPSE is not only affected by the company’sspecific factors such as companies’ performances, information disclosed, timely AGM, but also by the environmental factors like economy of the country, peace, security, violence, political stability, and demand and supply of shares. The capital market is not rationally sensitive to the internal as well as external factors perhaps that may be due to the lack of education, about the stock market, in investors. Although the political situation of the country is highly liquid, and the existing government policies are not being effectively implemented, the NEPSE Index is in increasing trend. So investors are interested to the capital market, but the favorable environment for the risky investment in it, has not been created.