Sunday, October 11, 2015

Determinants of Stock price of Nepalese Enterprises

Himalaya Ban[1], Kalpana Parajuli, Kushal Shrestha and Manish Bhattarai
This paper examines the determinants of stock price in Nepalese enterprises, related with commercial banks, hydropower and hotel companies. The market price per share is taken as the sole dependent variable and firm specific variable Cash dividend per share, Stock dividend per share, Retained earnings, Earning Per Share, Return on Assets, and macro-economic variable Inflation and Economic growth are taken as independent variable. The data are collected from the Banking and Financial Statistics, Banking Supervision report published by Nepal Rastra Bank ,NRB and Annual Report published by Securities Board of Nepal, SEBON from 2063/64 to 2068/69. The multiple regression models are applied to test the significance and identify relationship between the Market Price per share and independent variables.
The results show that there is positive significant impact of Cash Dividend Per Share and Economic growth on Market Price Per Share in Commercial Bank; positive significant impact of Earning Per Share and Economic Growth with Market Price per share in Hotel Enterprises; and positive significant impact of Return on Assets and Economic growth with Market price per share in Hydropower Enterprises. In totality Earning Per share and Economic growth have positive significant impact with Market Price per share in Commercial Banks, Hotel and Hydropower Enterprises.
Keywords: Market Price Per Share, Cash Dividend Per Share, Stock Dividend Per Share, Earning Per Share, Return on Assets, Retained Earnings, Inflation, Economic Growth.

[1]Himalaya Ban is a lecturer at Kathmandu University and he can be reached at
*The paper on the same topic was presented at Uniglobe International Conference II, Contemporary Issues & Challenges in Management, Hyatt Regency, Kathmandu, November 17-18, 2014