Stock price movement of Development Banks in Nepal

Abstract

This study investigates stock price movements of development banks in Nepal. The main purpose of this study is to investigate analysis and interpret the stock price movements of development banks in Nepal. To meet the purpose of the study descriptive and causal comparative research design was used. Five development banks were selected as a sample for the study between the fiscal year 2012/13 to fiscal year 2021/22. Data were obtained from respective development banks’ annual report, Nepal Stock Exchange and Security Board of Nepal annual supervision report. Data were analyzed through correlation and multiple regression technique by using SPSS version 25. Variables used were stock prices per Share (MPS) as dependent variable and Earnings per share (EPS), Net worth per Share (NWPS), Price earnings ratio (P/E Ratio) and Dividend per Share (DPS) as independent variables. The findings of the study show that the Earnings per Share (EPS) is positive insignificant impact with stock prices (MPS). Similarly, Net worth per Share (NWPS) is positive significant impact with stock prices (MPS), at 1 percent Significance Level of sample banks. Likewise, Price Earnings Ratio (P/E Ratio) has positive significant impact with stock prices (MPS), at 1 percent Significance Level of sample banks. Moreover, Dividend per Share (DPS) is positive insignificant impact with stock prices (MPS). The finding of this study will be helpful to the management of selected banks in making appropriate managerial decision.

Key words: stock prices, Dividend, Price earning, Earning per share, Capital market