An Empirical Study on Evaluating the Performance of Share Price Drivers in the Commercial Banking Service Sectors

Abstract

The stock market significantly impacts a country's economic development by influencing capital allocation and investment decisions. In this context, the current study set its sights on Nepalese commercial banks' variations in stock prices from the fiscal year 2013/2014 to 2023/2024. The study employed a descriptive and causal-comparative design using secondary data from seven conveniently selected commercial banks to analyze the impact of EPS, P/E ratio, DPS, and BVPS on MPS through multiple regression and correlation analysis. The results show that EPS and the P/E Ratio have a statistically significant and positive impact on MPS, implying that they have a high predictive value for explaining stock price movements. DPS and BVPS, while theoretically expected to be positive, had a weak and slightly negative relationship with MPS. This implies they do not significantly contribute to the observed stock price fluctuations. Based on these findings, the study recommends that regulatory authorities tighten policies and enforce them to promote a more competitive and transparent capital market in Nepal, thereby increasing investor confidence and market efficiency.