scholarly journals Impact of Accounting Ratios on Stock Market Price of Listed companies in Colombo Stock Exchange

2021 ◽  
Author(s):  
Chandrasegaran Larojan
Keyword(s):  
Regression Analysis ◽  
Stock Market ◽  
Stock Exchange ◽  
Pearson Correlation ◽  
Random Effect ◽  
Market Price ◽  
Fixed Effect ◽  
Effect Regression ◽  
The Impact ◽  
Accounting Ratios

This study investigates the impact of accounting ratios on stock market price of top twenty companies based on the highest market capitalization listed in the Colombo Stock Exchange (CSE). The objectives of this study were to examine the impact of Earnings per Share (EPS) on stock market price; to examine the impact of Dividend per Share (DPS) on stock market price, to examine the impact of Price Earnings ratio (PE) on stock market price and to examine the impact of Market to Book ratio (MB) on stock market price. The panel data was collected from the top twenty companies for the period of five years from 2015 to 2019. EPS, DPS, PE and MB ratios were used as the proxies for the independent variables and stock price was used as the proxy for the dependent variable for this study. In order to perform the inferential analysis Pearson correlation analysis, panel regression with fixed effect, random effect and pooled linear regression were used. Hausman test was adopted in order to choose either random effect regression or fixed effect regression. According to pooled regression analysis, EPS, DPS and PE ratios had positive significant impact on stock market price. MB ratio had a negative significant impact on stock market price. According to fixed effect regression analysis, EPS, PE and MB ratios had positive insignificant impact on stock market price whereas DPS had a positive significant impact on stock market price. This study offers an insight to the potential investors to make the rational investment decisions in the stock market.

scholarly journals Impact of Accounting Ratios on Stock Market Price of Listed companies in Colombo Stock Exchange

2021 ◽  
Vol 4 (3) ◽  
Author(s):  
Chandrasegaran Larojan ◽  
Keyword(s):  
Regression Analysis ◽  
Stock Market ◽  
Stock Exchange ◽  
Pearson Correlation ◽  
Random Effect ◽  
Market Price ◽  
Fixed Effect ◽  
Effect Regression ◽  
The Impact ◽  
Accounting Ratios

This study investigates the impact of accounting ratios on stock market price of top twenty companies based on the highest market capitalization listed in the Colombo Stock Exchange (CSE). The objectives of this study were to examine the impact of Earnings per Share (EPS) on stock market price; to examine the impact of Dividend per Share (DPS) on stock market price, to examine the impact of Price Earnings ratio (PE) on stock market price and to examine the impact of Market to Book ratio (MB) on stock market price. The panel data was collected from the top twenty companies for the period of five years from 2015 to 2019. EPS, DPS, PE and MB ratios were used as the proxies for the independent variables and stock price was used as the proxy for the dependent variable for this study. In order to perform the inferential analysis Pearson correlation analysis, panel regression with fixed effect, random effect and pooled linear regression were used. Hausman test was adopted in order to choose either random effect regression or fixed effect regression. According to pooled regression analysis, EPS, DPS and PE ratios had positive significant impact on stock market price. MB ratio had a negative significant impact on stock market price. According to fixed effect regression analysis, EPS, PE and MB ratios had positive insignificant impact on stock market price whereas DPS had a positive significant impact on stock market price. This study offers an insight to the potential investors to make the rational investment decisions in the stock market.

scholarly journals REACTION OF ISLAMIC STOCK MARKET TO MACROECONOMIC VARIABLES: A STUDY OF INDIA AND INDONESIA

2021 ◽  
Vol 7 (1) ◽  
pp. 148
Author(s):  
Mohammad Irfan ◽  
Salina Kassim ◽  
Sonali Dhimmar ◽  
Mohd Zahid ◽  
Nasrul Fahmi Zaki Fuadi
Keyword(s):  
Stock Market ◽  
Regression Model ◽  
Bilateral Trade ◽  
Stock Exchange ◽  
Random Effect ◽  
Suitable Model ◽  
Economic Activities ◽  
Macroeconomic Variables ◽  
Effect Regression ◽  
The Impact

India and Indonesia are among the world-largest democracies, having a strong international presence through involvement in various economic and intergovernmental organizations such as in the E7 countries and G20 countries groups. This study aims to identify the impact of macroeconomic variables on the Islamic stock markets of India and Indonesia. Two Islamic stock market indices are considered: the Indian Bombay Stock Exchange (BSE) Shariah Index and the Indonesian Jakarta Islamic Index (JII). At the same time, the macroeconomic variables are foreign direct investment (FDI), import, export, gross domestic product (GDP), broad money (M3), and exchange rate (ER). The study adopts panel regression analysis on yearly data covering the period from 2011 to 2020. The pooled OLS regression model, fixed effect regression model (FEM), and random effect regression model (REM) have been employed. With the REM model being suggested as the most suitable model through the Hausman test, the results suggest that FDI, export, GDP, and ER have shown positive and statistically significant influence on both the BSE Shariah and JII. It is also shown that the macroeconomic variables of India and Indonesia are heterogeneities in nature and having mean distribution effects. The study’s findings suggest that increasing the possibilities of bilateral trade and investment in the sectors such as health and pharmaceuticals, automotive components, information technology, agro products, and tourism between India and Indonesia will go a long way. It is expediting greater economic activities among these two countries.

scholarly journals Effect of Dividend on Stock Market Price: A Panel Data Approach

2020 ◽  
Vol 23 (1) ◽  
pp. 199-208
Author(s):  
Purna Man Shrestha
Keyword(s):  
Panel Data ◽  
Stock Market ◽  
Dividend Policy ◽  
Random Effect ◽  
Random Effect Model ◽  
Market Price ◽  
Lagrangian Multiplier ◽  
Return On Equity ◽  
Effect Model ◽  
The Impact

Dividend policy is major concern for investor, managers and policy makers. Proper dividend policy helps to achieve the wealth maximization goal of the firm. This study has examined the impact of dividend on stock market price of Nepalese enterprises. For this purpose 33 dividend paying companies listed on NEPSE has been selected as sample. Likewise, this study used unbalance panel data for the period of 2000/01 to 2018/19. Breusch and Pagan Lagrangian multiplier test concluded that Pooled regression model is not appropriate and Hausman test concluded that Random Effect model is not appropriate for the data used in this study. Thus, this study adopted Fixed Effect model to analyze the impact of dividend on stock market price. This study concluded that there is significant impact of dividend on stock market price of Nepalese enterprises after controlling return on equity, earnings per share and return on equity. Finally, this study concluded that cash dividend has significant negative and stock dividend has significant positive impact on stock market price of Nepalese enterprises.

Impact of deviation from target working capital on firm profitability: evidence from India

2019 ◽  
Vol 68 (8) ◽  
pp. 1510-1527 ◽  
Author(s):  
Punam Prasad ◽  
Narayanasamy Sivasankaran ◽  
Ankur Shukla
Keyword(s):  
Negative Impact ◽  
Stock Exchange ◽  
Fixed Effect ◽  
Working Capital ◽  
Content Type ◽  
Operating Income ◽  
Investment Level ◽  
Firm Profitability ◽  
Effect Regression ◽  
The Impact

Purpose The purpose of this paper is to assess the impact of deviation from the target investment in working capital (WC) (measured by net trade cycle (NTC)) on the profitability (measured by gross operating income (GOI) and net operating income (NOI)) of the listed non-financial Indian firms. Design/methodology/approach The study is based on the data collected on NTC, GOI, NOI and other variables pertaining to 242 listed non-financial Indian firms that form part of the Bombay Stock exchange 500 Index for the period 2012–2017 (1,452 firm-year observations). Following Banos-Caballero et al. (2010), the authors use a firm fixed effect regression as the benchmark regression for finding out the determinants of NTC of the sample firms. Furthermore, this study explores the impact of deviation (above and below target) from the target investments in WC on the firm profitability (GOI and NOI) employing fixed effect regression. Findings The result of this study reveals that Indian firms maintain a target NTC and try to converge in case of any deviations to it. Furthermore, the profitability of the sample firms was observed to be influenced by the deviation from the target NTC irrespective of whether the deviation was above or below the target investment level in WC. Practical implications This study highlights the importance of good WC management for firms due to the negative impact of the over- and under-investments in WC and contributes to the existing body of knowledge by suggesting that managers should keep close to the target WC and not deviate from this in order to maximize the firms’ profitability. Originality/value To the best of the knowledge of the researchers, this is perhaps the first study to examine the impact of firms’ deviation from their target investment in WC on the profitability for non-financial firms listed and operating in India.

Impact of Stock Splits and Rights Issue Announcements on Market Price: Evidence from India

2016 ◽  
Vol 7 (2) ◽  
Author(s):  
Babitha Rohit ◽  
Prakash Pinto ◽  
Shakila B.
Keyword(s):  
Stock Market ◽  
Stock Returns ◽  
Stock Exchange ◽  
Market Price ◽  
Abnormal Returns ◽  
Market Model ◽  
Stock Splits ◽  
Indian Stock Market ◽  
Rights Issue ◽  
The Impact

The current paper studies the impact of two events i.e stock splits and rights issue announcement on the stock returns of companies listed on the Bombay Stock Exchange. The study consists of a sample of 90 announcements for stock splits and 29 announcements for rights issue during the period 2011-2014. Market model is used to calculate the abnormal returns of securities. Positive Average Abnormal Returns were observed for the two events on the day their announcements, however they are not statistically significant. The study concludes that the Indian stock market is efficient in its semi-strong form.

scholarly journals The relationship between intellectual capital and firm performance

2017 ◽  
Vol 1 (1) ◽  
pp. 32-41 ◽  
Author(s):  
Amina Mohamed Buallay
Keyword(s):  
Firm Performance ◽  
Intellectual Capital ◽  
High Performance ◽  
Positive Impact ◽  
Stock Exchange ◽  
Random Effect ◽  
Listed Firms ◽  
Effect Regression ◽  
The Impact ◽  
The Relationship

This study aimed to measure the impact of intellectual capital on firm performance of listed firms in Saudi stock exchange. The study methodology was a pooled data collected from the Saudi stock exchange (TADAUWL) for the period from 2012 to 2014. The study sample is 489 observations from 171 listed firms. The study independent variable is Intellectual Capital components (HCE, SCE and CEE). The dependent variable is firm performance which measured using ROA, ROE and Tobin’s Q. The study also utilized five control variables in order to help measure the relationship between Intellectual Capital and Firm Performance. In conclusion, the study found that the Intellectual Capital level tends to be higher with firms that have high performance. However, there is variation in the level across the sectors. Random effect regression model was incorporated; the results revealed that there is no significant impact of Intellectual Capital on firm’s operational performance (ROA). However, there is the significant positive impact of Human capital on financial performance (ROE). Additionally, the study concluded that there is the negative significant impact on structural capital efficiency and positive significant impact on Capital Employed Efficiency on firms’ market performance (TQ). These results are expected to broaden the understanding of IC and its impact on firms’ performance in GCC economies in general and specifically in Saudi economic. Moreover, it will be useful for GCC firms to place their priorities and financial plans for effective and efficient use of Intellectual Capital.

scholarly journals Impact of Market Ratios on the Stock Prices: Evidence from Jordan

2020 ◽  
Vol 13 (4) ◽  
pp. 92
Author(s):  
Sufian Radwan Al-Manaseer
Keyword(s):  
Regression Analysis ◽  
Stock Prices ◽  
Stock Exchange ◽  
Dividend Yield ◽  
Dividend Payout ◽  
Industrial Companies ◽  
Earnings Per Share ◽  
Amman Stock Exchange ◽  
Effect Regression ◽  
The Impact

This study aims to investigate the impact of market ratios on the stock prices of Jordanian industrial companies listed on the Amman Stock Exchange for the period 2009-2018. The sample comprises 45 chosen from 56 industrial companies. Fixed effect regression analysis applied by using an e-views program. The study found an impact of the combined market ratios on the stock prices of Jordanian industrial companies. Also, the study found no impact of the dividend payout, the dividend yield, and the price-earnings ratios on the stock prices, whereas the earnings per share ratio impact the stock prices of Jordanian industrial companies listed on the Amman Stock Exchange.

Empirical Relationship Between Macroeconomic Variables and Stock Market: Evidence from India

2021 ◽  
pp. 0258042X2110531
Author(s):  
Miklesh Prasad Yadav ◽  
Aastha Khera ◽  
Nandita Mishra
Keyword(s):  
Stock Market ◽  
Stock Exchange ◽  
Empirical Relationship ◽  
Market Price ◽  
Macroeconomic Variables ◽  
Long Run ◽  
Johansen Cointegration ◽  
Short Run ◽  
Indian Stock Market ◽  
The Impact

This study investigates the relationship between the Indian stock market price behaviour and macroeconomic variables. The proxy for the Indian stock market is the BSESENSEX while Foreign Reserve, Exchange Rate (Indian vs. US Dollar) and CPI are proxies for the macroeconomic variables. The Johansen Cointegration Test and the Vector Error Correction Model (VECM) on monthly data collected from websites of Reserve Bank of India and Bombay Stock Exchange within the time period of January 2000 and February 2020 have been applied. We observe a contradiction between the results of trace statistics and the maximal eigenvalue of the Johansen Cointegration. The -trace statistics of cointegration allude to the long-run association between the Indian stock market and its constituent macroeconomic variables. The VECM is then applied to examine the long-run and short-run causalities and the results reveal the same. This study has profound implications for investors to diversify their portfolio, considering the impact of the constituent selected macroeconomic variables in the short run and long run. JEL Codes: B22, J11, R53

scholarly journals APAKAH PROFITABILITAS DAN NILAI BUKU BERDAMPAK TERHADAP RETURN SAHAM?: STUDI EMPIRIS PADA PERUSAHAAN LQ45

2019 ◽  
Author(s):  
Aldi Kurniawan ◽  
Irdha Yusra
Keyword(s):  
Stock Returns ◽  
Stock Exchange ◽  
Random Effect ◽  
Sampling Technique ◽  
Fixed Effect ◽  
Least Square ◽  
Financial Report ◽  
Panel Data Regression ◽  
Report Data ◽  
The Impact

At present, there are many options in Indonesia that can be chosen by people who have advantages and one of the investors makes a profit by investing. For investors, the capital market is a place to channel funds in the form of shares, with the hope of regaining high shares. This study aims to discuss the impact of profitability and book value on stock returns. The population in this study is the LQ45 company listed on the Indonesia Stock Exchange (IDX) per period 2013-2017. The sampling technique used a purposive sampling method and based on predetermined criteria obtained a sample of 10 companies. Financial report data is obtained from the official IDX website. The analytical method used is panel data regression analysis with the help of the application E-Views 8. The initial test is done, namely completing the Chow-Test to decide whether the method of Pooled least square or Fixed effect is used; and test the Hausman-test to decide whether the fixed effect method or random effect can be used. The results of this observation state that profitability has a positive and significant effect on stock returns and negative and significant approval book values on stock returns

Disinvestment in Indian central public sector enterprises: a performance improvement measure

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Priya Mandiratta ◽  
G.S. Bhalla
Keyword(s):  
Public Sector ◽  
Stock Market ◽  
Stock Exchange ◽  
Random Effect ◽  
Market Mechanism ◽  
Rank Test ◽  
Net Income ◽  
Content Type ◽  
Negative Results ◽  
The Impact

PurposeThe purpose of this study is to represent an attempt to empirically capture the impact of disinvestment on the financial and operating performance of 26 Bombay Stock Exchange (BSE) listed central public sector enterprises (CPSEs) in India which got divested through stock market mechanism during the time period of 2000–2014.Design/methodology/approachThrough ratio analysis different ratios such as return on assets, return on equity, net income efficiency, debt equity, dividend payout and employment levels have been computed. Pre- and post disinvestment performance of these firms is examined through Wilcoxon signed-rank test. The present research endeavors to examine the impact of disinvestment through random effect panel data models in order to control the effect of other firm specific variables.FindingsThe overall results of the study indicate statistically significant fall in profitability ratios. The empirical results have not witnessed positive effect of disinvestment on the profitability of the CPSEs; rather, this effect has found to be negative. The possible reasons behind these negative results could be poor pre disinvestment financial health of CPSEs, negative rate of return on capital employed by PSEs and inefficiency which need to be tested empirically by future researchers.Originality/valueThe fact that government-owned firms are typically less proficient or at least less gainful than private-owned firms is widely hypothesized. Therefore, the disinvestment policy aims at dropping the participation of the public sector in the economic actions of the country in order to support the private sector. The present study is a first of its kind to study the impact of disinvestment on the profitability of the firms, which got divested through stock market mechanism since the year 2000 by applying both univariate and multivariate analysis.

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