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Stock Price Determinants: Empirical Evidence from Muscat Securities Market, Oman

In: Firm Value - Theory and Empirical Evidence

Author

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  • Dharmendra Singh

Abstract

Stock price is one of the main indicators for measuring firm performance and also the only factor determining shareholders' wealth. Stock price changes are based on information related to the firm and the market as a whole. This paper is focused on the determinants of the share price of the twenty-six non-financial companies listed in Muscat Securities Market, Oman. In this study, closing annual stock price from 2011 to 2016 is the dependent variable and the firm-specific variables like firm size (logarithm of total assets), dividends payout, earning per share (EPS), debt ratio, price-earnings(PE) ratio, first lag of dependent variable(stock price) are the independent variables in the panel data regression using random effect model. There are two categories of research hypothesis: the first one is based on semi-strong form of Efficient Market Hypothesis (EMH) and second one is based on Arbitrage Pricing theory (APT). To test the second set of hypothesis, oil price, growth rate in GDP and consumer price index are considered as independent variables as they effect performance of business and so do the stock prices. EPS, debt ratio and first lag of stock prices are significant determinants of stock prices. Dividend payout, firm size and PE ratio are insignificant variables.

Suggested Citation

  • Dharmendra Singh, 2018. "Stock Price Determinants: Empirical Evidence from Muscat Securities Market, Oman," Chapters, in: Paolo Saona Hoffmann (ed.), Firm Value - Theory and Empirical Evidence, IntechOpen.
    • Handle: RePEc:ito:pchaps:144327
    DOI: 10.5772/intechopen.77343
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    File URL: https://www.intechopen.com/chapters/61720
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    Cited by:

    1. Antonio J. Dayag & Fernando Trinidad, 2019. "Assessment of the correlation between price-earnings ratio and stock market returns of universal banks in the Philippines," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 8(5), pages 172-181, September.

    More about this item

    Keywords

    dividend; stock price; Muscat; random effect; oil price;
    All these keywords.

    JEL classification:

    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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