Factors affecting market share price of nepalese insurance companies

Abstract

The aim of this research was to investigate the factors affecting the market share price of Nepalese Insurance Companies. The study was conducted on a sample of six insurance companies of Nepal, three of which were life insurance companies and three were non-life insurance companies. The research employed descriptive research and causal-comparative research design to meet the objectives of the study. Secondary data was collected from Annual Reports of the selected Insurance Companies from Fiscal Year 2070/71 to 2079/80. Correlation matrix was used to establish the relationship between the variables EPS, DPS, BVS, P/E Ratio, DY, RR, and Age of Company with the MPS. On the effect of various factors on the MPS, a regression analysis was conducted. For statistical hypothesis testing, p-value (probability value) is used to either accept or reject a hypothesis. Notably, a positive correlation between variables such as DPS, EPS, and P/E ratio and MPS was realized in the research study where DPS and EPS had a significant positive relationship and P/E ratio had a weak positive correlation with MPS. Conversely, MPS showed a weak negative relationship with DY and RR and a negligible negative relationship with BVS and Age of Company. The hypothesis testing results aligned with the findings of the correlation analysis. Moreover, the study indicated that DPS and EPS were the most influential factors in the Market Share Price of Nepalese Insurance companies. In conclusion, this study enriches the specific field of research that addresses factors affecting the market share price of Nepalese Insurance Companies, and the existing research can be useful for further research conducted not only within the same industry and the same country but also for the comparison with other countries, which will extend the existing knowledge base concerning the situation of Market Share Prices. Keywords: Nepalese Insurance Companies, Market Share Price (MPS), Earnings Per Share (EPS), Dividend Per Share (DPS), Retention Ratio (RR)