scholarly journals Financial Risk and Financial Performance: Evidence and Insights from Commercial and Services Listed Companies in Nairobi Securities Exchange, Kenya

2020 ◽  
Vol 8 (3) ◽  
pp. 51 ◽  
Author(s):  
Susan Kerubo Onsongo ◽  
Stephen M. A. Muathe ◽  
Lucy Wamugo Mwangi
Keyword(s):  
Financial Risk ◽  
Random Effect ◽  
Random Effect Model ◽  
Target Population ◽  
Annual Reports ◽  
Return On Equity ◽  
Service Companies ◽  
Effect Model ◽  
Negative Effect ◽  
Positive Coefficients

In Kenya, the last few years has seen the performance of companies listed under the commercial and services segment on the Nairobi Securities Exchange (NSE), experience mixed fortunes. The study sought to assess the implications of financial risk on the performance of these companies. The study applied explanatory research design. The target population were the 14 companies listed under this segment of NSE. Secondary panel data contained in published annual reports for the period 2013–2017 was collected. Panel regression model was applied with the random effect model being used based on the Hausman specification test. Findings showed that credit risk had an insignificant positive effect on return on equity (ROE) while liquidity risk had a significantly negative effect on ROE and operational risk had a positive insignificant effect on ROE. The positive coefficients from the data analysis indicated that commercial and service companies at NSE were able to take in more credit to boost performance of these companies however the negative coefficients shows that within the period of study these companies experienced high liquidity problems in that the current liabilities exceeded the current assets. Thus, concluding that these companies were unable to pay all their obligation when they were due.

Effect of Dividend on Stock Price: A Case of Fuel and Power Industries in Bangladesh

2019 ◽  
Vol 9 (2) ◽  
pp. 87
Author(s):  
Mir Md Nazrul Islam
Keyword(s):  
Stock Price ◽  
Dividend Policy ◽  
Random Effect ◽  
Random Effect Model ◽  
Fixed Effect Model ◽  
Fixed Effect ◽  
Return On Equity ◽  
Share Prices ◽  
Earnings Per Share ◽  
Effect Model

Dividend policy is an extensively researched topic in the arena of investments but still it remains an enigmatic that whether Dividend Policy affects the Stock Prices or not. The consequences of researches conducted in different stock markets are different. In Bangladesh, capital market investment is very essential and significant for the growth and market capitalization of domestic industry, trade and commerce. In current years Bangladesh had faced many precarious situations in its stock market. The Stock price reactions to the declaration of dividend of the fuel and power industry of Bangladesh are empirically examined. This study examines stock price reactions of listed dividend paying fuel and power industries in Dhaka stock exchange, Bangladesh for period of 11 years from of 2008-2018. This study will help us to make effective dividend decisions and effective implementation of dividend policies. In this study, Fixed Effect Model along with Random Effect Model have been used to estimate results. Both Models are implemented on panel data for explaining the association between dividend payments and share prices while controlling logarithm value of Profit after Tax, Earnings per Share and Return on Equity. The research is accompanied with a view to find whether the dividend announcement convey any evidence to the market that results a stock price volatility for adjusting the dividend announcement information while controlling the variables like Profit After Tax Earnings, Per Share and Return on Equity. The study also tested both the Models and found Random Effect Model is more significant than Fixed Effect Model. The result documented on the Random Effect Model shows that there are significant relationship with Retention Ratio, dividend per share and Return on Equity. In addition, Profit after tax shows the negative significant association and Earning per Shares insignificant with the share prices in Bangladesh Fuel and Power sector. 

scholarly journals Performance of Banks in Pakistan based on determinants of Profitability

2021 ◽  
Vol 2 (2) ◽  
pp. 139-148
Author(s):  
AQSA SIDDIQ ◽  
KHURSHEED IQBAL ◽  
SHAMS UR REHMAN
Keyword(s):  
Banking Sector ◽  
Random Effect ◽  
Random Effect Model ◽  
Fixed Effect Model ◽  
Positive Influence ◽  
Strategic Decision ◽  
Return On Assets ◽  
Return On Equity ◽  
Effect Model ◽  
Main Determinants

The study aims to seek the internal factors that affect the profitability of banks in Pakistan from a period of 2009 to 2013 by using two proxies i.e. Return on Assets (ROA) and Return on Equity (ROE). The panel data of fifteen banks have been obtained from the financial statements of the banks. Therefore, Hausman test has verified that random effect model is most appropriate model for Return on Assets (ROA), conversely fixed effect model is prominent for Return on Equity (ROE) for the current study. The empirical results confirm that investment to total assets, leverage, Net Performing Loan (NPL) to gross advances, capital ratio and total deposits to total equity are the main determinants of profitability across both proxies (i.e. ROA and ROE). Leverage and capital ratio have significantly negative, however net performing loan to gross advance and total deposit to total equity have significantly positive influence on profitability of banks across both models. Moreover, NPL to gross advance is insignificant determinant of Return on Equity. The results are worthy for bankers and all stakeholders to make strategic decision for the competitiveness of banking sector in Pakistan.

scholarly journals EFFECT OF R & D INVESTMENT ON PERFORMANCE OF BANKING SECTOR IN PAKISTAN

2018 ◽  
Vol 5 (1) ◽  
pp. 1-6
Author(s):  
Shaheen Fatima ◽  
Samreen Fatima ◽  
Nausheen Fatima
Keyword(s):  
Banking Sector ◽  
Stock Exchange ◽  
Random Effect ◽  
Random Effect Model ◽  
Fixed Effect ◽  
Least Square ◽  
Annual Reports ◽  
New Production ◽  
Effect Model ◽  
D Investment

Research and development activity initiates and promotes new production, increase knowledge level, and introduces new techniques of technology implementation and production. The current study presents and unveils the diversifying behavior of variables affecting the performance of banking sector and R&D investment association. cross sectional fixed effect model and random effect model utilizing ordinary least square methods were applied to secondary data collected from reliable sources of annual reports published by banks listed on Pakistan stock exchange and further such data was verified from state bank of Pakistan official sire .the data range from 2012-2017 and only 10 private banks were considered as sample size which were listed on Pakistan stock exchange. The intense literature guide that the performance of banks is affected by ROA, ROE, AND EPS. Furthermore Hausman test ass applied and it was concluded that when firm’s performance is dependent variable then fixed effect is better and thee is relationship between R&D investment and performance of banks.

scholarly journals Effect of Trading Volume, Market Capitalization, Firm Size in explaining Return on Vultures

2021 ◽  
Vol 2 (2) ◽  
pp. 50-64
Author(s):  
Dedi Hariyanto
Keyword(s):  
Firm Size ◽  
Trading Volume ◽  
Panel Data Analysis ◽  
Random Effect ◽  
Random Effect Model ◽  
Standard Form ◽  
Market Capitalization ◽  
Significant Negative Effect ◽  
Effect Model ◽  
Negative Effect

Purpose: The study aims to examine the effect of trading volume, market capitalization, and firm size in explaining return on vultures in selected companies in Indonesia. Methodology/Approach/Design: The population is 131 JII forming companies in IDX between December 2009 – May 2010 to December 2019 – May 2020. All data is transformed into standard form because the model used is path analysis. The corresponding regression of equation 1 is the Random Effect model and the corresponding Regression equation 2 is the Fixed Effect model. This study uses panel data analysis; the Chow test and Hausman test are also used. Data is processed using statistics EViews software.  Results: The results of the equalization test 1, trading volume has a significant negative effect on the return of shares. The results also show that the market capitalization has a significant negative effect on the return of shares, and consequently the size of the company has a significant negative effect on the return of shares. Hasil testing for equalization 2, trading volume has a significant effect on vultures, while market capitalization has no significant effect on vultures. The size of the company has a significant effect on vultures, and the return of the company has a significant effect on vultures. Practical Implications: This research is limited to the variety of indices and varieties of securities that become populations and samples. Future research can be developed by focusing on indices and securities as well as the development of other variables in the behavioral finance section in addition to herding. Originality/Value: This study differs greatly from previous studies in emerging markets in contributing to literature from a new direction in exploring investor returns and herding.

scholarly journals The Relevance of Good Corporate Governance Practices to Bank Performance

2021 ◽  
Vol 4 (2) ◽  
Author(s):  
Muhammad M. Ma’aji ◽  
◽  
Ediri O. Anderson ◽  
Christine G. Colon
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Random Effect ◽  
Random Effect Model ◽  
Least Square ◽  
Annual Reports ◽  
Suitable Model ◽  
Current Guideline ◽  
Board Committees ◽  
Effect Model

The purpose of this paper is to examine how corporate governance instruments impact firm value in the context of Cambodian banks. This paper considers foreign and domestic-owned banks in Cambodia. This study opts for a balanced sample of foreign and domestic owned banks for the period 2014-2018. Panel data regression is adopted for estimation of main results. The suitable model, i.e. fixed and random effect model is selected using the Hausman specification test where the result shows that the random effect model using generalized least square (GLS) regression is more suitable for the analysis. The findings show that Cambodian banks are having a substantially higher percentage of NEDs on their board, high implementation of governance procedures on board committees where on average the banks are having more than the required two board committees (audit and risk committees) as required by the Prakas on the governance of banks by National Bank of Cambodia. The average board size is around 8 members of which at least 3 members are having a postgraduate degree or a professional qualification. Policymakers need to improve on their supervisory function as the majority of the domestic and some foreign banks do not disclose their annual reports on their company website as required by the Prakas on Corporate Governance of Banks operating in Cambodia. Moreover, amendments should be made to the current corporate governance code for financial institutions as there are no explanatory notes that guide companies and therefore, the current guideline is open to individual and subjective interpretation.

scholarly journals PENGAMBILAN KEPUTUSAN INVESTASI SAHAM DENGAN MENGGUNAKAN ANALISIS FUNDAMENTAL PADA PERUSAHAAN INDUSTRI YANG TERDAFTAR DI BURSA EFEK INDONESIA (BEI)

2021 ◽  
Vol 5 (1) ◽  
pp. 50-59
Author(s):  
Fauzan Abdul Syakur
Keyword(s):  
Time Series ◽  
Cross Section ◽  
Random Sampling ◽  
Random Effect ◽  
Random Effect Model ◽  
Current Ratio ◽  
Return On Equity ◽  
Effect Model ◽  
Net Profit ◽  
Equity Ratio

Abstrak Penelitian ini dilakukan untuk menganalisis pengaruh faktor analisis fundamental terhadap return saham industri yang terdaftar di Bursa Efek Indonesia (BEI) dengan menggunakan pendekatan kuantitatif. Populasi penelitian ini mencakup Perusahaan Industri yang terdaftar di BEI tetapi dipilih 8 sampel cross section dengan menggunakan teknik random sampling dengan kriteria terdaftar di BEI dan memiliki data laporan keuangan time series periode 2015 - 2019. Data diambil dari laporan keuangan perusahaan yang telah diaudit dan variabel independennya adalah Harga saham dengan menggunakan Data Panel. Sedangkan pengujian spesifikasi model dilakukan dengan menggunakan Random Effect Model sebagai model kesesuaian. Temuan. Hasil penelitian menunjukkan beberapa faktor fundamental CR dan ROE secara parsial berpengaruh positif signifikan terhadap harga saham sedangkan DER, EPS, NPM berpengaruh negatif signifikan terhadap harga saham. Temuan ini diharapkan dapat memberikan kontribusi yang positif bagi perkembangan teori tentang kinerja keuangan suatu perusahaan. Implikasi manajerial dari penelitian ini adalah investor dapat menggunakan analisis fundamental dengan meniti pada CR dan ROE sebagai dasar pengambilan keputusan karena pengaruhnya terhadap harga Saham.Kata kunci: Current Ratio (CR), Debt to Equity Ratio (DER), Earning Per Share (EPS), Net Profit Margin (NPM), Return On Equity Ratio (ROE).

Percepatan Pembangunan Infrastruktur dan Penambahan Utang Luar Negeri Pemerintah: Potensi Manfaat vs Potensi Risiko

2017 ◽  
Vol 2 (4) ◽  
pp. 1-14
Author(s):  
Hangger Prihandoko
Keyword(s):  
Economic Growth ◽  
Panel Data ◽  
Random Effect ◽  
Random Effect Model ◽  
Infrastructure Development ◽  
Significant Negative Effect ◽  
Effect Model ◽  
Negative Effect ◽  
The Government ◽  
Basic Infrastructure

This study analyzes the effect of basic infrastructure development in the form of roads, electricity, education and health by the government on economic growth at the provincial level based on HDI groups namely provincial groups with high HDI and provincial groups with medium HDI. This study uses panel data composed of data across 32 provinces within the period of 2007-2014. Estimation is done by random effect model panel data regression analysis technique. The findings of this study are in high HDI provinces all forms of infrastructure are insignificant except educational infrastructure which has a significant negative effect, whereas in medium HDI provinces only health infrastructure that is not significant and only education infrastructure has a significant negative effect, other types of infrastructure such as roads, electricity and water have a significant positive effect. Based on these findings the prioritization of infrastructure development in relatively lagging regions is not only supporting the equitable distribution of economic growth but also the most efficient form of budget allocation for infrastructure development.   Abstrak Penelitian ini menganalisis pengaruh pembangunan infrastruktur dasar berupa jalan, listrik air, pendidikan dan kesehatan oleh pemerintah terhadap pertumbuhan ekonomi di tingkat propinsi berdasar kelompok IPM Tinggi dan IPM Sedang. Jenis data yang digunakan adalah data panel yang tersusun dari data lintas ruang 32 propinsi dalam periode tahun 2007-2014. Estimasi dilakukan dengan teknik analisis regresi data panel random effect model. Temuan hasil penelitian ini adalah di provinsi IPM tinggi seluruh infrastruktur tidak berpengaruh signifikan kecuali infrastruktur pendidikan yang signifikan dengan arah negatif, sementara di provinsi IPM sedang hanya infrastruktur kesehatan yang tidak signifikan dan hanya infrastruktur pendidikan yang signifikan negatif, jenis infrastruktur lain berupa jalan, listrik dan air memiliki pengaruh signifikan positif. Berdasar temuan tersebut maka pemberian prioritas pembangunan infrastruktur pada daerah yang relatif tertinggal selain mendukung pemerataan pertumbuhan ekonomi juga merupakan bentuk alokasi anggaran pembangunan infrastruktur yang paling efisien.

Firm Size, Operational Risk and Performance: Evidence from Commercial and Services Companies Listed in Nairobi Securities Exchange

2019 ◽  
Vol 3 (VI) ◽  
pp. 372-379
Author(s):  
Susan Kerubo Onsongo ◽  
Stephen Muathe ◽  
Lucy Mwangi
Keyword(s):  
Risk Management ◽  
Financial Performance ◽  
Firm Size ◽  
Random Effect ◽  
Random Effect Model ◽  
Operational Risk ◽  
Target Population ◽  
Annual Reports ◽  
Operational Risks ◽  
And Performance

The study sought to assess the financial performance of the companies listed in the commercial and services sector at the Nairobi Securities Exchange (NSE), Kenya with an aim of determining the implications of firm size and operational risk on their performance. It was anchored on the agency theory. The study applied explanatory research design and the target population was the 14 companies listed under this sector. Secondary panel data contained in published annual reports for the year 2013 to 2017 was collected. A panel regression model was applied with the random effect model being used based on the Hausman specification test. Findings showed that operational risk had a positive insignificant effect on performance as proxied by return on assets (ROA). The findings further showed that firm size had a moderating effect on the relationship between operational risks and performance. It concluded that firm size played a role in the risk management of a company i.e. companies with higher total assets managed risk better than their counterpart. The study recommends that for companies to record improved financial performance, they needed to manage their operational risks by implementing risk management initiatives and increasing their total assets base.   

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.

scholarly journals SOES CORPORATE PERFORMANCE ON IDX AND SOME INFLUENCED FACTORS

2021 ◽  
Vol 19 (4) ◽  
pp. 884-895
Author(s):  
Zainuddin Iba ◽  
◽  
Yudi Syahputra ◽  
Ghazali Syamni ◽  
Mahdawi Mahdawi ◽  
...  
Keyword(s):  
Stock Exchange ◽  
Random Effect ◽  
Random Effect Model ◽  
Institutional Ownership ◽  
Annual Reports ◽  
Political Connections ◽  
Factors Affecting ◽  
Common Effect ◽  
Effect Model ◽  
Random Effect Models

State-owned enterprises are government-owned businesses that have been privatized and can be close to politicians from political parties. They are also notorious for being poorly managed. The purpose of this research is to examine how political connections, institutional ownership, cash holdings, company size, and leverage affect the performance of state-owned enterprises on the Indonesia Stock Exchange. The data for this study comes from the annual reports of 20 state-owned enterprises (SOEs) listed on the IDX from 2014 to 2018. This research model is a panel regression model that tests the common effect, fixed-effect, and random effect models. Based on the Chow test and Hausman test, the best model in this study is the random effect model. The results found that political connections, institutional ownership, and cash holding are significant factors affecting the performance of state-owned companies. Another finding was that companies with stronger political connections affect the performance of state-owned companies. On the other hand, this study did not find companies having political connections affect the performance of state-owned companies. This finding is expected to provide benefits for investors to consider SOEs companies to invest.

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