DETERMINANTS OF SHARE PRICE ON NEPALESE COMMERCIAL BANKS

Abstract

The factors influencing the share price of Nepal's commercial banks are investigated in this research. Earnings per share, book value per share, dividend per share, and price earnings ratio are the independent variables, while market price per share is the dependent variable. For this research, 40 observations from 2013–14 to 2022–23 were taken from four joint venture commercial banks. The information was gathered from the annual reports of the chosen joint venture commercial banks and financial statistics released by Nepal Rastra Bank. To evaluate the significance and relevance of various factors influencing the share price of joint venture commercial banks, regression models and the correlation coefficient were determined. The findings indicate that the market price per share is most strongly and significantly influenced by the dividend per share. Additionally, it is evident that banks with greater market prices per share also have larger profits per share, dividends per share, and book value per share. Nevertheless, within a ten-year period, this research is restricted to only four joint venture commercial banks; this might alter depending on the sample size and other factors. The study also comes to the conclusion that while strong earnings, an attractive valuation (as measured by price earnings ratio and book value per share), and a consistent dividend all help to drive up the price of commercial banks' shares, other industry-specific and macroeconomic factors also influence market price per share.