The Impact of Stock Characteristics on Its Market Price in Jordanian Commercial Banks

Abstract

The study aims at identifying the impact of stock characteristics represented by (Earnings Per Share (EPS), Book Value Ratio (BVR), Dividends Per Share (DPS), Dividends Payout Ratio (DPR), Market to Book Ratio (MBR), Price Earnings Ratio (PER), and Yield Per Share (YPE)) on the market stock price in the 13 commercial banks in Jordan during the period from 2005 to 2018. Multiple Linear Regression has been used to illustrate the impact of the independent variables and the controlling variables on the dependent variable.
 
 The study has found that there is a significant impact of stock characteristics on its market price at the Jordanian commercial banks. The study also found a statistically significant impact for each book value ratio, dividends per share, market to book ratio, price-earnings ratio, and yield per share on the market price at the Jordanian commercial banks. However, there was no statistically significant effect for each of the earnings per share and dividend’s payout ratio on the market price at the Jordanian commercial banks. The study recommends that investors, analysts, and decision-makers use the characteristics of stocks when carrying out analyses before making important investment decisions that can affect their wealth in the future through forecasting stock prices.

Determinants of Stock Market Price in Nepalese Commercial Banks

“…In other words, share price of selected commercial banks increases with positive growth of BVPS, PE, ROE and DIV and negative growth of firm size (FS). The results is in line with the findings of Sukhija (2014), Bhattarai (2014), Sharif et al (2015), Silwal & Napit (2019) and Thapa (2019), and opposed to the findings of Shammout (2020) and Veronika & Zuhroh (2021). Regarding the relationship of profitability with net worth and dividend payment, there is moderate positive and significant relationship as a result of correlation coefficient of ROE with BVPS and DIV are .369 and .540 respectively with p-value of .000 for each whereas ROE has negative and significant relationship with price earnings ratio as indicated by correlation coefficient -.329 and p-value .001.…”

“…The model of share price (MPS) on selected independent variables implies that a unit increase in 1 unit of BVPS, PE, ROE and DIV leads to 2.240, 5.605, 12.846 and 7.072 units increase in MPS whereas increase in 1 unit of firm size (FS) leads to 65.724 decrease in MPPS and all of selected variables are statistically significant to shape the share price at 1% significance level as pointed by p-value 0.000 for these variables which are less than 0.01.The result shows that the selected variables BVPS, PE, ROE, DIV and FS are strong factors in determining MPS of Nepalese commercial banks. The results of significant effect of BVPS, PE, DIV, FS and ROE on MPPS is in line with the findings of Sukhija (2014), Bhattarai (2014), Sharif et al (2015), Silwal & Napit (2019) and Thapa (2019), and opposed to the findings of Shammout (2020) and Veronika & Zuhroh (2021). Similarly, the regression results has supported the signaling theory and the signal that is conveyed is in the form of a financial report or annual report by management as a form of information.…”

Factors Influencing Stock Price Variability of Commercial Banks in Nepal

“…Similarly, Shammout's (2020) research discovered that stock characteristics have a significant impact on the market price at Jordanian commercial banks. This study also discovered a statistically significant impact on the market price of Nepalese commercial banks for each book value ratio, dividends per share, market-to-book ratio, price-earnings ratio, and yield per share.…”

Factors affecting Stock Price Behaviour of Commercial Banks in Nepal Stock Exchange

“…Stock features, according per Shammout's (2020) research findings, significantly influence the market price at Jordanian commercial banks. In addition, for each book value ratio, dividends per share,…”