Taking several independent variables of some company and also calculating their impact on the dependent variable through regression, P value analysis. And also R square analysis, coefficient and direction of change analysis.

1. Impact of Relevant Company
Specific Factors on the Market
Price of the Stock
1
By:
Mehedi Hassan
Bappy
-21
M. Ridwanul
Azim
-23
Debanik
Chakraborty
-25

2. O
V
E
R
V
I
E
W
RESEARCH QUESTION
DATA COLLECTION
REGRESSION ANALYSIS
RECOMMENDATI
ONS 2
OBJECTIVE OF THE
STUDYVARIABLES AND
TERMINOLOGIES

3. About the Study
3
The Study is based on 31 listed
companies from DSE basing on different
industry and collecting data of particular
relevant independent factors to find out
their impact on market price through
regression analysis.

4. 4
Research Question?
How do the company specific
factors impact the stock price
of the respective companies?

5. 5
Objective of the study
₪ To find data of different samples
companies regarding their stock price &
impacting company specific factors.
₪ To run a Regression Analysis
₪ To determine at what direction &
degree the change of stock price is
taking place due to the change of
relevant company specific factors.

6. 6
Objective of the study
₪ To identify which impacting variable
have significant relation with the stock
price & which don’t have that.
₪ To find out the reasons why “the should
be” relevant factors have become
irrelevant
₪ To recommend some measures as the
relevant factors proves to be irrelevant

7. 7
Regression analysis is a powerful statistical
method that allows examining the
relationship between two or more variables
of interest.
Regression analysis is also used to
understand which among the independent
variables are related to the dependent
variable, and to explore the forms of these
relationships.
What is Regression Analysis?

8. Variables and
Terminologies
8

9. 9
Market Price of the stock
1. Net AssetValue per Share (NAV
per share)
2. Cash Dividend Percentage
3. Earnings Per Share (EPS)
4. Price Earnings Ratio (P/E Ratio)
5. Net Profit AfterTax (NPAT)
Variables in Our Study
Depend
ent
Variable
Independe
nt
Variable

10. 10
Dependent
Variable:
 Variable whose value depends upon
independent variables
 Variable whose Variation depends on the
variation of others
 Denoted by Y

11. 11
Independent
Variable:
 A variable whose variation does not
depend on that of another is called an
independent variable
 Manipulated to obtain different values
of Dependent variable
 Denoted by x

12. 12
Share Price:
 A share price is the price of a single share
of a number of saleable stocks of a
company, derivative or other financial
asset.
 In layman's terms, the stock price is the
highest amount someone is willing to pay
for the stock, or the lowest amount that it
can be bought for.

13. 13
Earnings Per Share:
Earnings per share (EPS) is the portion of a
company's profit allocated to each
outstanding share of common stock
EPS = (Net Income - Dividends on Preferred
Stock) / Average Outstanding Shares

14. 14
Price Earning Ratio:
The price-earnings ratio (P/E ratio) is the
ratio for valuing a company that measures
its current share price relative to its per-
share earnings.
P/E Ratio= Market Value per Share /
Earnings per Share

15. 15
Cash Dividend Percentage:
 A cash dividend is money paid to
stockholders, normally out of the
corporation's current earnings or
accumulated profits.
 Dividends are commonly paid on a
monthly, quarterly or yearly basis.

16. 16
Net Profit After Tax:
 Net profit after tax (NPAT) is just the net
income of a business less all taxes.
 It is the entirety of all incomes minus all
costs, including cost of goods sold,
depreciation, interest, and taxes.
 This estimation is generally appeared as
both an aggregate dollar sum and a per
share computation.

17. 17
Net Asset Value Per Share:
 It is calculated by dividing the total net
asset value of the fund or company by
the number of shares outstanding.
 NAVPS is also referred to as the book
value per share.

18. 18
Paid Up Capital:
Paid-up capital is the measure of cash an
organization has gotten from investors in
return for offers of stock
Paid up Capital= Initial Face Value of each
share*Total Number of shares Outstanding

19. 19
Main Source is Secondary sources of data.
Data from the website of Dhaka Stock
Exchange.
Data from the annual reports of the
companies that have been chosen.
Different websites to get a clear idea
regarding the topic.
Certain articles to understand regarding the
research topic and the relative ideas.
SOURCES OF DATA

20. DATA COLLECTION
20

21. 21
Market Price of the stock
1. Net AssetValue per Share (NAV
per share)
2. Cash Dividend Percentage
3. Earnings Per Share (EPS)
4. Price Earnings Ratio (P/E Ratio)
5. Net Profit AfterTax (NPAT)
Variables in Our Study
Depend
ent
Variable
Independe
nt
Variable

22. 22
Sample Size &
Selection
 Our sample size is 31.
 We are considering data from 31 companies
from different industries in our country.
 All of the 31 companies are enlisted in Dhaka
Stock Exchange.
 We have chosen 31 representing companies
from market dominating 12 industries.
 Companies are selected based on their Paid Up
Capital

23. 23
Selected Companies from Different Industries
Industry Companies Paid Up Capital
(In millions TK)
Engineering Singer Bangladesh 766.94
BBS Cables Ltd 1380
Bangladesh Lamps
Limited
93.71
Fuel & Power DESCO 3975.69
Khulna Power
Company Limited
3612.85
Travel & Leisure United Airways BD 8280.98
The peninsula
Chittagong limited
1186.67
Banks Trust Bank 5,569.66
BRAC Bank 10,725

24. 24
Telecommunication Grameenphone Ltd 13,503
Bangladesh Submarine
Cable Company Ltd
1,649.06
Cement M. I. Cement Factory
Ltd
1,485
Aramit Cement Ltd 338.8
Ceramic Sector RAC Ceramic BD Ltd 3,890.62
Standard Ceramic
Industries Ltd
64.6
Food & Allied Apex Foods Ltd 57
Olympic Industries Ltd 1,999.38
Insurance Bangladesh General
Insurance company
LTD
540.27
Industry Companies Paid Up Capital
(In millions TK)
Selected Companies from Different Industries

25. 25
Pharmaceuticals Imam button industries
limited
77.00
ACI limited 482.02
Beximco
pharmaceuticals
limited
4055.56
Financial Institutions Fareast Finance &
Investment limited
1,640.63
Uttara Finance and
investments Limited
1,252.20
IDLC Finance Limited 3770.51
Textile Apex Spinning &
knitting mills limited
84.00
Shepherd Industries
Limited
1366.27
Industry Companies Paid Up Capital
(In millions TK)
Selected Companies from Different Industries

26. 26
Time Period
• We have chosen the year 2017 as our time period.
• The values of NAV per share, Cash dividend
percentage, Earnings per Share (EPS), Price
Earnings Ratio (P/E Ratio), Net Profit after Tax
(NPAT) etc. of our 31 selected companies will be
obtained for the Year 31st December, 2017.
• The Stock Prices of the Companies on 31st
December, 2017(specific) will be considered.

27. 27
Data of Variables
Name of The
Companies
Net Asset
Value per
Share
Cash
Dividend
Per Share
Earnings
Per Share
Price
Earnings
Ratio
(Times)
Net Profit
After Tax
Stock
Price
Singer BD 21.2 10% 10.1 19.3 3,119,200,540 195.2
BBS Cables 30.26 15% 8.66 10.49 2,961,345,769 106
Bangladesh
Lamps Limited
80.78 30% 7.1 24.5 66,220,100 184.3
DESCO 37.78 10% 0.44 34.39 340,600,400 45.5
Khulna Power
Company
Limited
23.42 9.29% 26 26.88 985,345,600 58.5
United Airways
BD Ltd.
6.80 10% 0.34 10.65 (283,610,300) 5.6

28. 28
Data of Variables
Imam button
industries
limited
6.22 - -0.38 - -2,890000 36
ACI limited 296.49 115% 21.25 18.20 1,065,000 460
Beximco
pharmaceutical
limited
61.82 12.5% 20.58 14.94 2,226,695 104.7
Fareast Finance
& Investment
limited
6.37 - -5.72 -
-937,720,100
11.3
Uttara Finance
and
Limited
49.74 30% 7.25 10.03
907,710,000
72.8
IDLC Finance
Limited
33.41 30% 6.13 13.91
2,277,120,200
87.9
Apex Spinning
knitting mills
52.77 20% 2.76 40.65
23,160,000
118
Name of The
Companies
Net Asset
Value per
Share
Cash
Dividend
Percent
Earnings
Per Share
Price
Earnings
Ratio
(Times)
Net Profit
After Tax
Stock
Price

29. 29
Data of Variables
Name of The
Companies
Net Asset
Value per
Share
Cash
Dividend
Percent
Earnings
Per Share
Price
Earnings
Ratio
(Times)
Net Profit
After Tax
Stock
Price
Square Textile
limited
41.05 20% 2.30 29.44
411,390,500
64.1
RAC Ceramic
Ltd
18.25
10%
2.88
20.97
1,018,012,122 2.88
Standard
Ceramic
Industries Ltd
13.51
10%
(0.39)
0
(2530888) (0.39)
Apex Foods Ltd 115.10
20%
1.56
91.67
8,920000 1.56
Olympic
Industries Ltd
23.80
45%
8.22
35.28
1,643,250,674 8.22
Bangladesh
General
Insurance
company LTD
19.76
10%
1.10
20.18
59,419,803 1.10
Continental
Insurance Ltd
19.06
5%
1.49
15.17
63,452,667 1.49

30. 30
Name of The
Companies
Net Asset
Value per
Share
Cash
Dividend
Percent
Earnings
Per Share
Price
Earnings
Ratio
(Times)
Net Profit
After Tax
Stock
Price
Data of Variables
Trust Bank 21.75 20% 3.11 13.72 1,750,860,00
0
42.8
BRAC Bank 30.39 10% 6.14 17.65 5,498,138,720 108.9
Prime bank 24.11 7% 1.03 26.63 1,215,528,259 27.6
One bank 19.33 15% 2.99 8.30 2,627,981,009 24.2
Grameenphone
Ltd
26.01 205% 20.31 5.27 27,422,648,00 471
Bangladesh
Submarine
Cable Company
Ltd
36.44 12% 1.93 62.23 318,230,520 106
M. I. Cement
Factory Ltd
47.8 20% 4.45 19.5 661,079,000 85
Aramit Cement 11.15 6% (2.97) 0 (100,665,287) 29

31. REGRESSION
ANALYSIS
31

32. The List of Independent &
Dependent variables with
values
32

35. THE REGRESSION
FORMULA
Y= Constant + B1*X1 + B2*X2
+……..+ Bn*Xn
Here,
Y= Dependent Variable
X= Independent Variable,
B= Coefficient of Independent
35

36. 36
In our Study
• NPV per share = X1
• Cash Dividend Percentage= X2
• EPS = X3
• P/E Ratio = X4
• NAPT = X5.
• Market price of Stock = Y.
So our linear equation would be,
Y= Constant

37. 37
After we have run the regression of our Y & X
values, we get the following outputs
Running the Regression
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.919458379
R Square 0.845403711
Adjusted R Square 0.814484453
Standard Error 49.45064612
Observations 31

38. ANOV
A
df SS MS F
Signific
ance F
Regre
ssion 5
334309
.7438
66861
.9487
7
27.34
23028
6
2.2285
E-09
2445.
Table-2

39. 39
Coefficie
nts
Standa
rd
Error t Stat P-value
Interce
pt
11.717579
23
15.575
41432 0.752312522 0.458888498
NAV
Per
Share
0.388072
157
0.3792
80061 1.023181011 0.316021711
Cash
Divide
nd %
2.300795
31
0.8169
37303 2.81636706 0.00934358
EPS
2.266574
79
1.5857
45605 1.429343259 0.165283413
P-E
Ratio
0.552416
708
0.5166
49956 1.069228211 0.295182464

40. Determinant of
Existing relationship
between the
independent
variables &
dependent variable
Required to be less
than 0.15 to have a
relationship with
dependent variable.(In
85% Confidence
Level)
Cash dividend
percentage has less
P-Value than 0.15.
NAV Per share, NPAT,
EPS & P/E Ratio don’t
have any straight
relationship with the
market price of the Stock
(dependent variable)
.
P VALUE
ANALYSIS
40

41. 41
After we have run the regression of our Y & X
values, we get the following outputs
Running the Regression
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.919458379
R Square 0.845403711
Adjusted R Square 0.814484453
Standard Error 49.45064612
Observations 31

42. DATA ANALYSIS
R Square
Analysis
Significant
F analysis
42
84.54%.
84.54% change of
our dependent
variable can be
explained by our
independent
variables
2.2285E-09 or
.000000002228
Significant F is
far less than
0.05, and thus
we can conclude
our analysis is a
strong one.

43. 43
Coefficie
nts
Standa
rd
Error t Stat P-value
Interce
pt
11.717579
23
15.575
41432 0.752312522 0.458888498
NAV
Per
Share
0.388072
157
0.3792
80061 1.023181011 0.316021711
Cash
Divide
nd %
2.300795
31
0.8169
37303 2.81636706 0.00934358
EPS
2.266574
79
1.5857
45605 1.429343259 0.165283413
P-E 0.552416 0.5166

44. 44
The coefficient of
NAV per Share,
Cash Dividend
percentage, EPS &
P/E Ratio have
positive values.
The amount of these
values directly
influence the increase
or decrease of the
dependent variable or
stock price
Their growth increases
the stock price, their
decline decreases the
stock price. .
The coefficient of NPAT
is negative. The
increase or decrease of
NPAT, inversely impact
the stock price.
Coefficient & Direction of
change analysis

45. The coefficient values of NAV per
share & P/E Ratio is lower.
Its change mildly impacts the stock
price.
Cash dividend & EPS - bigger coefficient
value than other positive values.
Their increase or decrease highly affects the
Stock price.
.
45
oefficient & Direction of change analys

46. 46
According to P-value
 Only Cash Dividend Percentage has a
significant impact on the dependent
variable.
 Earnings per Share has a negligible
 Other Independent Variables aren’t
to any change.

47. 47
According to coefficient and
direction analysis
 Cash Dividend Percentage and Earnings
share has largely positive values with
positive impact.
 NAV per Share and Price Earning ratio
lower positive values with slight positive
impact.

48. 48
This clearly reflects the poor efficiency of
capital market of Bangladesh. And it also
reflects asymmetric flow of information in
the market.
This sort of overvaluation problem occurs from
investment in the market by people who are
not properly informed and are irrationally
motivated to a decision by any sort of
positive or rumored information.

49. RECOMMENDATIO
N
49

50. R
E
C
O
M
M
E
N
D
A
T
I
O
N
2. Different educational program or
seminar can be arrange on the stock
market investment including more
circulation about the stock market
through different medias.
.
1. To increase the level of efficiency:
Regulatory bodies can implement more
strict regulatory measures to ensure
smooth flow of information among
investors and can include exemplary
punishable offence.
50

51. 51
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YOU