Impact of Fundamental Factor on Stock Price of Nepalese Commercial Bank

This study is carried out with the objective of determining the impact of fundamental factors on stock price of Nepalese commercial banks. The fundamental factor in this study includes Return on Assets (ROA), Return on Equity (ROE), Earnings per Share (EPS), Non-performing Loan to Total Loan (NPL) and Credit Deposit Ratio (CD). The fundamental data and stock price data of past 4 years i.e. (2013-14 to 2016-17) of 14 banks selected on the basis of judgement sampling has been taken for the purpose of this study and the correlation and regression analysis has been performed to determine the relationship.

The results from this study reveals that Earnings per Share and Return on Assets has positive relationship with stock price of the particular bank while Return on Equity, Non-Performing Loan to Total Loan and Credit to Deposit Ratio has negative relation with the stock price of particular bank. The regression coefficient of all the variables except for Return on Assets are significant with stock price at 5 percent level of significance.

Contents 

DECLARATION 

Recommendation

Acknowledgements 

Abstract

List of Tables:

List of Figures.

List of Abbreviation

1. Introduction

1.1 Background

1.2 Research problem 

1.3 Purpose of the Study

2. Literature Review.

2.1 Variable Definition

2.1.1 Market Stock Price:

2.1.2 Fundamental Factors: 

2.1.3 Return on Assets:

2.1.4 Return on Equity:

2.1.5 Non-Performing loan to Total Loan Ratio:

2.1.6 Credit Deposit Ratio: 

2.1.7 Earnings per Share: 

2.2 Empirical Evidence 

2.3 Deficiencies in the evidence 

2.4 Theoretical Framework

2.5 Hypothesis 

3. Research Methodology

3.1 Research Design 

3.2 Population and Sample 

3.3 Data Collection Method

3.4 Research Methods 

3.5 The Model 

4. Results 

4.1 Trend Analysis 

4.2 Descriptive Statistics 

4.3 Correlation Analysis: 

4.4 Diagnostic Test 

Testing for Multicollinearity

Variance Inflation Factor Test: 

4.5 Regression Analysis 

5. Discussion, Implication and Recommendations

For Future Researchers: 

6. Bibliography 

Annexes 

Annex 1: Sample Banks.

Annex: 2: Data collection from annual report of sample companies and NEPSE

Annex: 3: Correlation of Share Price and other independent variables

Annex:4: Regression Analysis Table