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The Effect of Accounting and Market Indicators on Predicting the Stock Prices for Jordanian Banks: An Econometric Study for the Period (2010-2015)

Author

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  • Suleiman Daood Al-Oshaibat
  • Sufian Radwan Al-Manaseer

Abstract

This study aims at examine the ability of a group of financial ratios, which is derived from the financial statements of Jordanian commercial banks, to predict the prices of the market shares for the period (2010-2015). Besides, it investigates the explanatory power and the nature of the relation between some accounting and market indices, including compound and individual indicators, and the market share price. In order to achieve the objectives of this study, the researcher used the Panel Data and the time series data. While the Hussmann Test is used to choose the appropriate model whether it is a static effect modal or a random effect one based on Chi-Square probability value. Throughout the discussion and the data analysis, the study highlights a set of results. One of the most important results shows that the effects of the independent variables as a single package on predicting the stock market prices were very strong. In addition, the researcher comes up with some recommendations which emphasize the importance of disclosing the financial statements under study to investors and analysts periodically due to the importance of transparency in the financial sector. Moreover, while distributing earnings on participants, investors¡¯ preferences should be taken into consideration due to their influence on the share price since it is a futurist result of the investors¡¯ evaluations of the earnings distribution policy.

Suggested Citation

  • Suleiman Daood Al-Oshaibat & Sufian Radwan Al-Manaseer, 2018. "The Effect of Accounting and Market Indicators on Predicting the Stock Prices for Jordanian Banks: An Econometric Study for the Period (2010-2015)," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 10(4), pages 146-153, April.
    • Handle: RePEc:ibn:ijefaa:v:10:y:2018:i:4:p:146-153
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    References listed on IDEAS

    as
    1. Juan Manez & Maria Rochina & Juan Sanchis, 2004. "The decision to export: a panel data analysis for Spanish manufacturing," Applied Economics Letters, Taylor & Francis Journals, vol. 11(11), pages 669-673.
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    More about this item

    Keywords

    market indicators; net income; dividend distributions; book value per-share; earning per-share; stock prices; Jordanian banks;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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