Relationship between trading volume, stock return and return volatility: A case of Nepalese insurance companies

  • Niraj Acharya Snowball Capital
  • Sumit Pradhan Uniglobe College, Pokhara University, Nepal
Keywords: Dividend per share, firm size, market price of share, price earnings, ratio, return on assets

Abstract

This study examines the factors affecting the share price of Nepalese non-life insurance companies. The knowledge of the factors and their possible impact on share prices is highly appreciable as it would help investors make wise investment decisions and enable firms to enhance their market value. This study is based on secondary data of 15 non-life insurance companies which are listed in Nepal stock exchange. The study covers seven years period from the fiscal year 2011/12 to 2017/18. The result shows that firm size is positively related to market price of share and price earnings ratio. It indicates that larger firm size leads to increase in market price of share and price earnings ratio. However, the study shows that inflation is negatively related to market price of share and price earnings ratio. The study also shows that dividend per share and return on assets are negatively related to the market price of share and price earnings ratio. Similarly, earnings per share have negative relationship with market price of share and price earnings ratio. The study concludes that the increase in return on assets and earnings per shares do not explain the variation in stock price in Nepalese non-life insurance companies. Nepal is one of the emerging economy; the determinants identified may provide knowledge to the potential investors about the key factors affecting share prices in the country and accordingly assist them in optimizing their investment strategy.

Downloads

Download data is not yet available.
Abstract
19
PDF
9

Author Biographies

Niraj Acharya, Snowball Capital

Stock Analyst

Sumit Pradhan, Uniglobe College, Pokhara University, Nepal

Research Assistant

Published
2019-12-31
Section
Articles