Fundamentals of Common Stock Pricing: Evidence from Commercial Banks of Nepal

Karki, Dipendra

doi:10.3126/nccj.v3i1.20247

Cited by 7 publications

(7 citation statements)

References 14 publications

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“…is the firm's share price to earnings per share after tax. The ratio shows how many times shareholders can compensate the corporation's annual earnings (Chaopricha et al, 2007;Karki, 2018)…”

Section: Methodsmentioning

confidence: 99%

Influence of Industry and Firm Characteristics on Share Price Movement in Nairobi Securities Exchange, Kenya

Kengere¹,

Kule²,

Mutasa³

2020

theijbm

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The study examined the influence of firm characteristics on share price movement (SPM) at Nairobi Securities Exchange, Kenya. The features selected for the study were firm size, product variety, firm age, Earnings per Share (EPS), ownership and corporate social responsibility (CSR). From the population of sixty-seven listed firms at the bourse as of December 2018, a purposive sample of 47 firms was extracted from the Main Investment Market Segment (MIMS). Secondary data for the period 2000-2018 was collected from the listed company's annual financial statements, company websites, the Capital Markets Authority and NSE Handbooks. The relationship among firm size (using sales revenue as proxy), product variety, age of the firm, EPS, ownership and CSR on SPM was determined from the unbalanced panel data comprising 777 observations. Econometric statistical analysis tools were used on ordinary least squares model that possessed explanatory power 54.7% for the SPM. Firm size (ρ=0.0384), ownership (ρ=0.034) and product variety (ρ=0.043) were significantly related to share price movements, whereas firm age, EPS and CSR impact were insignificant. The association of the combined predictors for each separate sector to SPM was also examined and found to be significant in the sectors of construction allied (ρ=0.024), telecommunications and technology (ρ=0.0323), investments (ρ=0.037) and commercial services (ρ=0.041). However, agriculture, automobiles, banking, energy, manufacturing and insurance sectors were statistically insignificant with ρ≥ 0.05.

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Section: Methodsmentioning

confidence: 99%

Influence of Industry and Firm Characteristics on Share Price Movement in Nairobi Securities Exchange, Kenya

Kengere¹,

Kule²,

Mutasa³

2020

theijbm

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“…Survey results also identified political instability as the most influential determinant. Beyond political events, various factors, including investors' knowledge base, firm-specific fundamentals, and others, exert substantial influences on stock prices (Maharjan et al, 2022;Karki, 2018. A study on individual investor behavior in Bartin by Islamoglu et al (2015) explored these influential factors, providing valuable psychological insights into the intricacies of investment decision-making.…”

Section: Literature Reviewmentioning

confidence: 99%

Unanticipated Political Events and Their Effect on the Nepalese Insurance Sector and Stock Market

Karki,

Kakshyapati,

Bhattarai

et al. 2024

NJISS

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This study analyzes the relationship between unanticipated political events and their profound impact on both the insurance sector and the Nepalese stock market (NEPSE). Utilizing comprehensive analysis, the research spans 200 days before to 10 days after the political event’s announcement. Employing Levene’s test, dummy variable regression, and estimated average abnormal return, the study reveals significant effects of political events on the insurance index and NEPSE indices. The pre-event period is particularly significant, indicating potential information leakage. Window Frame 1 (-10, -1) stands out as the most profoundly impacted period, with Window Frame 2 (0, +10) witnessing moderate impact during the announcement and Window Frame 3 (+2, +10) experiencing a comparatively lesser post-event effect. Nepali Congress Wins Election (Event 1) and End of Nepal Blockade (Event 3) were identified as the most significant events for the Insurance and NEPSE indexes. Dummy variable regression emphasizes the significance (P < 0.05) of multiple window frames (mostly 1, 5, & 6) in the NEPSE index, suggesting early information leakage adjustments. The insurance sector also demonstrates a highly significant (P < 0.05) impact of unanticipated political events across various data points, with the post-event period (Windows 2 and 3) as the sole exception. Cumulative abnormal return analysis demonstrates that the Nepalese stock market is moderately inefficient, as it reinforces the market’s attempt to incorporate political influences within three to five days of the announcement date. These findings bear implications for investors, policymakers, and regulatory authorities seeking to understand the dynamics of the Nepalese stock market, enabling informed decision-making during times of political transitions and uncertainty.

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“…In Nepal, common stocks represent the most popular form of investment due to the limited options available to investors. However, the primary market remains unsystematic and vulnerable, with investors predominantly favoring sectors such as banking and finance (Kadariya, 2012, Gurung, 2017Karki, 2017Karki, , 2018. These studies shed light on key determinants of stock pricing and Nepalese investors' behavior, revealing a reliance on heuristic decision-making, herding behavior, and overconfidence.…”

Section: Marketabilitymentioning

confidence: 99%

Cross-influence of Risk, Return, and Governance on Decision-Making in Hydropower Investments

Karki

2024

Econ J Dev Issues

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The sustainable growth of an economy pivots on a robust financial system, particularly in the context of capital availability. This study analyzes the behavior of investors towards initial public offerings (IPOs), focusing on the hydropower development sector in Nepal. The research explores the multifaceted relationship between factors such as risk, return, and governance on investor behavior, considering elements like Idiosyncratic risk (IR), timing of issue (TIPO), Bandwagon effect (BE), expected return (ER), sectoral performance (SP), corporate governance (CG), pre-issue financial health (PFH), and marketability (MKT). Additionally, sociodemographic variables and their connection to investor behavior are examined. Employing a descriptive research design, the study involves a sample size of 392 individuals, selected through a convenient sampling method. The study's main finding documented that idiosyncratic risks, expected returns, and corporate governance stand out as crucial factors influencing investment decisions (P < 0.05). Notably, the regression analysis indicated the absence of a significant impact from market risks (P > 0.05), including the bandwagon effect and IPO timing, on investor behavior towards hydropower IPOs. This finding suggests that Nepalese investors prioritize returns and organizational governance over market risks, despite having significant concerns regarding idiosyncratic risk. The analysis also reveals significant associations between investor behavior and sociodemographic variables like age, education, occupation, and primary investment objectives (P < 0.05). This study offers valuable insights and implications for investors seeking to align investments with their goals. Hydropower developers should prioritize investor protection and transparency, while regulators must enhance disclosures, shareholder accountability, and project oversight.

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Fundamentals of Common Stock Pricing: Evidence from Commercial Banks of Nepal

Abstract: Abstract

Cited by 7 publications

References 14 publications

Influence of Industry and Firm Characteristics on Share Price Movement in Nairobi Securities Exchange, Kenya

Influence of Industry and Firm Characteristics on Share Price Movement in Nairobi Securities Exchange, Kenya

Unanticipated Political Events and Their Effect on the Nepalese Insurance Sector and Stock Market

Cross-influence of Risk, Return, and Governance on Decision-Making in Hydropower Investments

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