Determinants of Equity Share Prices of the Listed Banks in Amman Stock Exchange: Quantitative Approach
Journal Article
, Dr. Mohammad Abdelkarim Almumani . 2014
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International Journal of Business and Social Science, Vol. 5 No. 1; January 2014
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Abstract:
This study is attempted to identify the quantitative factors that influence share prices for the listed banks in Amman Stock Exchange over the period 2005-2011. Using empirical analysis of a set of independent and dependant variables. In the present study, the ratio analysis, Correlation and a linear multiple regression models have been selected to measure the individual as well as combined effects of explanatory variables on the dependant variables. The empirical findings shows that , there is a positive correlation between the independent variables DPS (correlation coefficient =.51) , EPS(correlation coefficient =.84) BV (correlation coefficient =.81),PE (correlation coefficient =.81) and S (correlation coefficient =.57) and dependant variable MP and it is also significant at 1% probability level. However, further empirical findings that, there is a significant positive relationship between EPS and the MP of the listed banks in Jordan. This is evident in the t-statistics value of 2.29 and a P>|t| = (.03). Moreover, moreover, there is a significant relationship between banks BV and MP. This is evident in the t-statistics value of (2.110 and the P>|t| =.04). Another empirical finding from the regression analysis shows a positive relationship between P/E and MP. This is evident in the t-statistics value of (5.90 and the P>|t| =.00). Empirical findings from the regression analysis on the relationship between S and MP indicate that there is an inverse relationship between S and MP. This is however evident in the t-statistics value of (-2.28 and P>|t| =.03).Finally, other variables (DPS and DP) have insignificant impact on MP.
Keywords: Financial Factors, Equity Share Prices, Earning Per Share, Book Value per Share, Dividend Payout, Price Earnings Ratio