Asian Journal of Research in Business Economics and Management
  • Year: 2020
  • Volume: 10
  • Issue: 9

Determinants of share price of commercial banks in Nepal

Academic Director, Business Unit Head, Excel Business College, Pokhara University Affiliated, New Baneshwor, Kathmandu & Faculty Member, Patan Multiple Campus, Tribhuvan University, Patan Dhoka, Lalitpur, Nepal

Online published on 9 October, 2020.

Abstract

The present study has examine the factors that has affecting the market share price of commercial banks from 2013/ 14 to 2017/18 of Nepalese commercial banks. The banks specific secondary panel balance data were collected from 12 sample commercial banks by using convenient sampling technique and the data of macroeconomic variable were collected through the economic survey which was published by Ministry of Finance, Nepal. Market share price was proxy of dependent variable. The dividend payout ratio, dividend yield, earnings per share, price earnings ratio, bank size and gross domestic products growth rate and inflation rate were used as independent variables. The study were employed descriptive, correlational and casual comparative research design. The data were analysis through the Pooled OLS and Fixed Effects model as directed by model diagnosis test. The findings from both model were more or less same. The dividend payout ratio has negative and statistically significant with market share price. The dividend yield, earnings per share, price earnings ratio were positive and statistically significant with market share price. The ban size, gross domestic products growth rate and inflation rate were not role to determine the market share price. The study has recommended for the management of the commercial banks to strengthen its effort for effective management of the banks specific factors to avoid the negative effect on the share prices.

Keywords

Market share price, Dividend payout ratio, Dividend yield, Earnings per share, Price earnings ratio, Bank size and gross domestic products growth rate and inflation rate, Nepal, Commercial banks