Determinants of Stock Prices of Commercial Banks in Nepal

Abstract

The focus of the study is to identify the factors affecting share price of commercial banks in Nepal over the period of 2008/09 to 2014/15 using empirical analysis of a set of independent and dependent variable. In this study EPS, P/E, S, DY and DPR have been selected as independent variables and MPS has been taken as dependent variable. Linear multiple regression is used to determine whether the selected independent variables have influences the share price or not. The result indicates that earnings per share, price earnings ratio, dividend yield and dividend payout ratio have significant impact on the share price. Further, results of study indicated that earning per share is the strongest determinant of share price, so this study suggests that commercial banks have to increase their earnings per share.