Stock Price Adjustment to Corporate Accounting Disclosure: A Quantitative Study on Dhaka Stock Exchange (DSE), Bangladesh.

Ghosh, Pallabi; Ghosh, Sutap Kumar

doi:10.5296/ijafr.v5i2.8258

“…The variables that depicted high level of colinearity were not dropped from the model because these are important variables to investors as well as to banking industry. These results are consistent with the findings of [53] and are contrary to [50].…”

Section: Correlation Matrix Analysis and Multi-collinearitysupporting

confidence: 92%

Do Accounting Numbers Have Any Relation with Stock Prices? A Case of Public and Private Sector Banks of India

Bhatia¹,

Mulenga²

2019

TEL

2

0

View full text Add to dashboard Cite

Capital market research examines the ability of accounting numbers to influence the stock prices thus stock returns. This paper attempts to study the association between the accounting variables and stock price for banking sector in India and also to explore whether same variables influence the stock price of private and public sector banks in India. Nine accounting variables for the period of ten years have been studied for BSE listed banks. The study used panel least regression analysis by incorporating Fixed effect model (FEM) and Random effect model (REM), where nine set of accounting variables regressed against market share price of private and public sector banks for a period of 10 years from 2005 to 2014. The empirical findings revealed that, out of nine independent variables used; the earnings per share, book value per share, assets turnover and current ratio were significant in private sector banks and earnings per share, book value per share, return on equity and net non-performing assets ratio were significant in public sector banks. Overall empirical findings reported that the fundamental accounting variables in public sector banks are more relevant than that of private sector banks and this supports the hypothesis of the study. This is against the notion raised in 90s that accounting information has become less value relevant.

show abstract

“…This indicates that Net Operating Cash Flow influences the share price significant positively. The results also revealed that NAVPS was positively correlated with the share's market value at a 1% significance level supporting Halonen et al (2013); Tharmila and Nimalathasan (2013) and Ghosh and Ghosh (2015) but varying from Miah (2012). Investors want to ensure sufficient NAVPS to maximize wealth of the company.…”

Section: Discussionsupporting

confidence: 74%

“…The Beta coefficient of NAVPS is 3.963, with a p-value of 0.000 statistically significant at 1% level. It also means the NAVPS statistically significant impact on the share price supporting Halonen et al (2013); Tharmila and Nimalathasan (2013) and Ghosh and Ghosh (2015) but varying from Miah (2012). The beta coefficient of EPS is -3.650 with a p-value of 0.100 statistically significant at 10% level.…”

Section: Regression Analysissupporting

confidence: 55%

“…It means EPS has a significant impact on the MVPS similar to the result found by Omokhudu and Ibadin (2015); 2018) but varying Ghosh and Ghosh (2015). The beta coefficient of CDPS and SDPS are 0.174 and 0.192, with a p-value of 0.946 and 0.990, respectively, which are statistically not significant varying Omokhudu and Ibadin (2015); Zahan and Rana (2020) and Olowolaju and Ogunsan (2017).…”

Section: Regression Analysissupporting

confidence: 55%

“…Vijitha and Imalathasan ( 2014) conducted a research on Colombo Stock Exchange and found a significant association of EPS, NAVPS, and ROE. Ghosh and Ghosh (2015) found that EPS, ROE and NAVPS have a significant positive control on MVPS. Kwon (2009) concluded in later (Andriantomo & Yudianti, 2013;Pathirawasam, 2013) supported that compared to cash flows and EPS, BVPS has more power to influence the MVPS.…”

Section: Literature Reviewmentioning

confidence: 89%

See 2 more Smart Citations

Untitled

2021

Journal of Asian Business Strategy

0

View full text Add to dashboard Cite

This study intends to determine the Value relevance of accounting information (VRAI) that emphasizes the impact of different information produced by accounting on the market price of the share. This paper tries to determine the VARI on pharmaceutical companies' share price at the Dhaka Stock Exchange (DSE) of Bangladesh. For this purpose, I have collected data from different Pharmaceutical companies listed under the DSE for the period starting from 2017 to 2019. In this study correlation, ANOVA and regression analysis are applied to ascertain the association between Financial Accounting Information like Earnings per Share (EPS); Net Operating Cash Flow Per Share (NOCFPS); Net Asset Value Per Share (NAVPS); Cash Dividend Per Share (CDPS), and Stock Dividend Per Share (SDPS) and Market Value Per Share (MVPS). The results confirmed a statistically significant positive relationship of NOCFPS, NAVPS with MVPS. Differently, the results also confirmed a statistically significant negative relationship between EPS and MVPS. The results also ascertained that CDPS, and SDPS have no significant but positive relationship with MVPS. Finally I concluded that the information produced by accounting systems are value relevance and important in decision making. The existing literature of VRAI will enrich by results of this study. This study recommends the existing and potential investors to use accounting information for taking efficient and effective investment decisions. Contribution/ Originality:This study is one of the very few studies examining the VRAI on pharmaceutical companies listed in the DSE in Bangladesh. This research is one of the primary studies in Bangladesh in pharmaceutical sector. INTRODUCTIONThe VRAI is the importance of accounting information on investment decisions on stocks. Investors invest their capital and want to ensure that there principle amount and return on investment will come back quickly. Expectation of positive rate of return is an essential part of investment (Hossain, 2013). For this, before investing in stock, they want to know the ability and strength of the company. They need accurate information about the companies for making a proper decision. (Hossain, 2020b) argued that the key expectation of the investors is to make certain the getting back of investment along with return timely. The different financial reports and disclosures of the company are the main sources of information for the investors. Companies provide different accounting information timely for the investors concerned about the company's performance and present condition.

show abstract

The Value Relevance of Accounting Information and its Impact on Stock Prices: A Study on Listed Pharmaceutical Companies at Dhaka Stock Exchange of Bangladesh

Hossain

¹

2021

Journal of Asian Business Strategy

View full text Add to dashboard Cite

This study intends to determine the Value relevance of accounting information (VRAI) that emphasizes the impact of different information produced by accounting on the market price of the share. This paper tries to determine the VARI on pharmaceutical companies' share price at the Dhaka Stock Exchange (DSE) of Bangladesh. For this purpose, I have collected data from different Pharmaceutical companies listed under the DSE for the period starting from 2017 to 2019. In this study correlation, ANOVA and regression analysis are applied to ascertain the association between Financial Accounting Information like Earnings per Share (EPS); Net Operating Cash Flow Per Share (NOCFPS); Net Asset Value Per Share (NAVPS); Cash Dividend Per Share (CDPS), and Stock Dividend Per Share (SDPS) and Market Value Per Share (MVPS). The results confirmed a statistically significant positive relationship of NOCFPS, NAVPS with MVPS. Differently, the results also confirmed a statistically significant negative relationship between EPS and MVPS. The results also ascertained that CDPS, and SDPS have no significant but positive relationship with MVPS. Finally I concluded that the information produced by accounting systems are value relevance and important in decision making. The existing literature of VRAI will enrich by results of this study. This study recommends the existing and potential investors to use accounting information for taking efficient and effective investment decisions. Contribution/ Originality:This study is one of the very few studies examining the VRAI on pharmaceutical companies listed in the DSE in Bangladesh. This research is one of the primary studies in Bangladesh in pharmaceutical sector. INTRODUCTIONThe VRAI is the importance of accounting information on investment decisions on stocks. Investors invest their capital and want to ensure that there principle amount and return on investment will come back quickly. Expectation of positive rate of return is an essential part of investment (Hossain, 2013). For this, before investing in stock, they want to know the ability and strength of the company. They need accurate information about the companies for making a proper decision. (Hossain, 2020b) argued that the key expectation of the investors is to make certain the getting back of investment along with return timely. The different financial reports and disclosures of the company are the main sources of information for the investors. Companies provide different accounting information timely for the investors concerned about the company's performance and present condition.

show abstract

Stock Price Adjustment to Corporate Accounting Disclosure: A Quantitative Study on Dhaka Stock Exchange (DSE), Bangladesh.

Cited by 4 publications

References 15 publications

Do Accounting Numbers Have Any Relation with Stock Prices? A Case of Public and Private Sector Banks of India

Do Accounting Numbers Have Any Relation with Stock Prices? A Case of Public and Private Sector Banks of India

Untitled

The Value Relevance of Accounting Information and its Impact on Stock Prices: A Study on Listed Pharmaceutical Companies at Dhaka Stock Exchange of Bangladesh

Contact Info

Product

Resources

About