DETERMINANTS OF STOCK PRICE OF COMMERCIAL BANKS IN NEPAL

Abstract

The study entitled “Determinants of stock price of Nepalese commercial banks” has been conducted having two samples such as five sample commercial bank Limited out of total 20 commercial banks. The major objective of this study is to analyze determination of stock price in Nepalese commercial banks. The samples have been chosen on the basis of easily availability of annual reports. The total number of observations is twenty having ten years‟ annual financial data of two sampled banks. As per research design descriptive and analytical research design have been employed. The statistical tools consist of mean, standard deviation, C.V. as well as the inferential statistic consists of mainly correlation and regression analysis i.e. fixed effect model for better evaluation of undertaken variables such as market price per share, liquidity (cash reserve ratio), price earnings ratio, firm size, earnings per share and dividend per share. The dependent variable market price per share (MPS), is positively correlated with independent variables such as price earnings ratio (P/E) and earnings per share (EPS) which implies that they move in the same direction. In other words when one increases another one also increases and vice versa. Further, it can also be observed that the dependent variable market price per share (MPS) which implies the meaning that they move in the inverse direction. In other words when one increases another one also decreases.