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
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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).htmlType
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