Stock Price Movement of Nepalese Commercial Banks
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Department of Management
Abstract
This study investigates Stock Price Movements of commercial banks in Nepal. The
main purpose of this study is to investigate, analysis and interpret the share price
movement of Commercial Banks of Nepal. To meet the purpose of the study
descriptive and causal comparative research design was used. Seven commercial
banks were selected as a sample for the study between the fiscal year 2012/13 to
fiscal year 2018/19. Data were obtained from respective commercial 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 Market price per Share (MPS) as dependent
variable and Earnings per Share (EPS), Dividend per Share (DPS), Book Value per
Share (BVPS) and Price Earnings Ratio (P/E Ratio) as independent variables. The
MPS has positive relation with EPS, P/E ratio and BVPS but has negative relation
with DPS. The findings of the study show that there is significant positive correlation
between all independent variables (EPS, DPS, BVPS and P/E Ratio) and dependent
variable (MPS). Besides this, Earnings, book value, dividend payment, paid up
capital, price earnings ratio, and political stability were the determinants of the share
price in NEPSE from the respondents of the survey. Finally, the analysis of Nepalese
share market, researcher recommends that government should formulate and
implement a rigid rules and regulations for the further development of share market.
A mechanism to take immediate action against fraud companies is to be established.
As a result, Nepalese capital market could be more competitive.