Abstract:
Stock speculation is always a chancy scheme. Investors are hesitant to put in Stock
Market. If investors come to make out concerning the accurate factors influence the stock
price, they will spend in stocks self-assuredly. This thesis looked at the realistic
relationship among the stock price and company’s fundamental factors of Karachi Stock
Exchange. The intention of this study is to explore the factors that effect on share price
variability of sugar sector of Pakistan.
Panel analysis approach has been used in the study on ten companies of sugar sector of
Karachi Stock Exchange over the period of time from Jan 2011 to Dec 2015, the scrutiny
attempt to attain competent factor estimation as well as to authenticate the constancy of
the association among stock price behavior and corporation fundamentals. Data
information is examined via four methods: through descriptive statistics method,
correlation analysis, regression analysis method and random and fixed effect model. To
find out the research objective, fixed effect model and random effect model has been
evaluated. The study has ROA (return on assets), ROE (return on equity), EPS (earning
per share) and DPS (dividend per share) as explanatory variables and share prices as
explained variable. Relationship among variables is determined by correlation; moreover
the change in explained variable as a result of explanatory variables is explained by
means of regression analysis. Outcome gives an idea about that 54.09% deviation in
explained variable is explain through ROA, EPS and DPS.
The study disclose that return on asset is negative and significant determinant of stock
price in sugar sector at the same time as earning per share and dividend per share are
positive and significant factors of stock price of sugar segment. The study reveals that in
general the model is significant and additionally, a specification analysis is carry out to
make a decision either a random effect or else fixed effect model is used and according to
it random effect model is appropriate in sugar segment of Karachi Stock Exchange.
Investors within Pakistan are required to make a decision about which stock be supposed
to purchase. The outcomes of this paper provide instruction to the investors in stock
selection. At the same time of taking decisions they must take into consideration about
corporation information. The companies know how to put their policies as well as
strategies by taking into account somewhat essential factors, meant for company
continued existence and victory
