Impact of fundamental factors on stock price: a case based approach on pharmaceutical companies listed with dhaka stock exchange
Date
2013-09Publisher
© 2013 International Journal of Business and Management InventionMetadata
Show full item recordCitation
Haque, S., & Faruquee, M. (2013). Impact of fundamental factors on stock price: a case based approach on pharmaceutical companies listed with dhaka stock exchange. International Journal of Business and Management Invention, 2(9), 34–41. Retrieved from http://www.ijbmi.org/papers/Vol(2)9/Version-1/G0291034041.pdfAbstract
This paper aims at identifying the influence of various fundamental factors in determining the
market price of shares in Dhaka Stock Exchange (DSE). For this study 14 listed pharmaceutical companies
have been considered which comprises of 70% (14 companies out of 20) of the total listed companies under
pharmaceuticals and chemical industry (PCI) in Dhaka Stock Exchange (DSE). Time frame of the research is
seven years slot (2005 to 2011). The analysis is done in two stages. The first segment of the paper attempts to
find out the co-relation between market price of the stocks and companies’ performance, which includes earning
per share (EPS), dividend per share (DPS), return on equity (ROE), return on assets (ROA), and the ratio of
fixed asset to total asset (FA/TA). In the second segment, the market price of stocks under sample has been
compared to fundamental or intrinsic price. This paper considers Net Asset Value (NAV) as ideal value of stock.
The study depicts that the market price is very insensitive toward fundamentals of companies and current
market price is highly overvalued compared to the ideal value of stocks, which reinforces that fact that the
impact of unauthorized information has a greater influence in determining the price of stocks in
pharmaceuticals and chemical industry in DSE.
Keywords
Dhaka stock exchange; Fundamental factors; Ideal price of stock; Net asset value; Stock priceDescription
This article was published in International Journal of Business and Management Invention [© 2013 International Journal of Business and Management Invention] and the definite version is available at : http://www.ijbmi.org/papers/Vol(2)9/Version-1/G0291034041.pdf The article website is at: http://www.ijbmi.org/v2i9(version1).htmlCollections
Related items
Showing items related by title, author, creator and subject.
-
A broad study on BRAC EPL stock brokerage limited : impact of commission rate on BRAC EPL stock brokerage Ltd.
Farina, Tasmin Jahan (BRAC University, 2016-09-07)BRAC EPL Stock Brokerage Limited is a subsidiary of BRAC Bank Limited. It commenced operation under a new management team obtaining merchant bank license from the Securities and Exchange Commission (SEC) and became BRAC ... -
Working capital management practiced in Pharmaceutical companies in Dhaka stock
Chowdhury, Anup; Amin, Md. Muntasir (BRAC University, 2007)Among all the problems of financial management, the problems of working capital management have probably been recognized as the most crucial one. It is because of the fact that working capital always helps a business concern ... -
Rationalities of Z-category shares in Dhaka stock exchange: are they in financial distress risk?
Chowdhury, Anup; Barua, Suborna (BRAC University, 2009)Financial distress is a situation where a firm’s operating cash flows are not sufficient to satisfy current obligations and the firm is forced to take corrective actions, and a firm in financial distress may also face ...