STOCK PRICE BEHAVIOR OF COMMERCIAL BANKS IN NEPAL

Abstract

The purpose of this study is to analyze the Stock price behavior of Nepalese commercial banks. This study aims to evaluate the determinants influencing the stock prices of Nepalese commercial banks. Through a comprehensive analysis, the research seeks to elucidate the relationship between crucial financial indicators such as book value per share, dividend per share, earnings per share, price-to-earnings ratio, and return on equity on the stock prices of commercial banks in Nepal. By analyzing the effects of BPS, DPS, EPS, P/E, and ROE on stock prices, this research endeavors to provide valuable insights into the dynamics governing the Nepalese banking sector's stock market performance. In this study, Bivariate Correlation and linear multiple regression models are employed to assess the impact of explanatory variables on dependent variables. Data are sourced from the annual reports of selected commercial banks, the report of Nepal Rastra Bank, and various official and unofficial publications. The analysis utilizes appropriate financial and statistical tools, adopting a descriptive and causal-comparative research design. The research is based on data collected from ten commercial banks listed on the Nepal Stock Exchange (NEPSE) for the fiscal years 2012/13 to 2021/22, using a convenience sampling method. The calculated data have been tabulated and analyzed using MS-Excel and SPSS. This paper examines the relationship between book value per share, dividend per share, earnings per share, price-earnings ratio, and return on equity on the market price of Nepalese commercial banks through descriptive statistics, correlation, and regression analysis. The study concludes that book value per share, Dividend per share, earnings per share, price earnings ratio, return on equity have positive significant relationship on market price.