Factors Affecting the Share Price of Nepalese Commercial Banks

Abstract

The purpose of this study is to analyze the factors affecting the market price of Nepalese commercial banks. In the present study, Bivariate Correlation and a linear multiple regression models are selected to measure the effects of explanatory variables on the dependent variables. The data are collected from the annual reports of selected commercial banks, report of Nepal Rastra Bank and other official and unofficial publications. Data are analyzed by using appropriate financial and statistical tools and the descriptive research design is used. The Bivariate correlation and multiple regression analysis is use to examine the relationship between independent and dependent variable The study is based on data collected from six commercial banks listed in Nepal Stock Exchange (NEPSE) for the period of FY 2012/13- FY 2019/20 by convenience sampling method. Calculated data has been tabulated and analyzed by using MS-Excel and SPSS. The paper investigates the relationship between earnings per share, book value per share, price earnings ratio, return on assets and size of the bank on market price of Nepalese commercial banks by using Descriptive Statistics Correlation and Regression and ANOVA test. The study concludes that book value per share, earning per share and price earnings ratio have positive significant relationship and return on assets has positive insignificant impact on market price. Size has negative relationship and is statistically insignificant with stock price of Nepalese Commercial Banks.

Key words: Market price per share, Book value per share, Price earnings ratio, Earning per share, Return on assets, Size of the bank.