Determinants of Stock Price in Singapore's Manufacturing Sector

Abstract

Determination of factors influencing the share prices has been one of the favorite themes of researchers, academicians as well as the practitioners. Empirical research indicates, though not conclusively, that firms' internal financial performance indicators and external macroeconomic variables affect the share prices. The notable among those factors that have been found to affect the stock prices are Earning per Share (EPS), Net Cash Flow (NCF), Leverage, Gross Domestic Product (GDP) and Inflation. The present study has been conducted to revalidate this relationship in the context of manufacturing sector in Singapore. Panel regression technique has been used to carry out the analysis for of data pertaining to 263 manufacturing companies in Singapore on for a time period of 10 years. The results indicate the GDP, Inflation and earnings per share impact the prices of common stock but the relationship does not seem to be very strong.