Stock pice behaviour of insurance companies in Nepal

Abstract

This study is examined to stock price behavior of insurance companies in Nepal. The main objectives of this study are to analyze the effects of insurance companies on their share price, to examine the dividend policy that any effects on share price of insurance companies, to examine the capital leverage that any effects on share price of insurance companies and to assess the size and growth that any effects on share price of insurance companies. EPS, P/E, DPS, Size, DY are the independent variables and MPS is the dependent variable in this study. Mean, standard deviation, correlation and multiple regression analysis are taken to present data. The major finding of this study were Market Price per Share increases, Dividends Per Share tend to decrease and vice versa. Such a substantial negative correlation suggests an inverse relationship between market valuation and dividend distribution. Continuing with DPS, the negative correlation with MPS is complemented by a negative correlation with EPS. This implies that companies with higher dividends per share might exhibit lower earnings per share and vice versa. There is negative relationship between D/Y and MPS after adjusting for the scale of the variables. The positive Beta coefficient of 0.248 indicates that the impact of Size on MPS is positive after adjusting for the scale of the variables. DPS, EPS and Size are the significant relationship between MPS. D/Y and P/E Ratio are the insignificant on MPS. Keywords: Insurance Companies, Market price share, P/E Ratio, Earning per share and Dividend.