DETERMINANTS OF STOCK PRICE IN BAHRAIN STOCK MARKET

Determinants of Stock Price in Bahrain stock Market



Abstract

There are a lot of economic variables like gross domestic product, interest rates, monthly Demand and Supply, employment, and other related data affects daily stock prices. This research is crucial for investors both individual and institutional, organizations that listed in Bahrain Stock Exchange, Securities Market, Financial Institutions, Investing Firms, policy makers and the Government. To do investment for investors the most important and affecting factors on their investment decision is their future financial plans. Companies are also identifying the most influencing factors on their stock price and investors' behavior would affect their future financial policies and strategies. The aim of this research is to clarify related factors affecting the stock prices of firms and financial companies listed in Bahrain Stock Market. The followings are the objectives of the study:1) To identify factors, affecting the stock price, 2) To allocate rank of the (interior, exterior, political, economical and environmental determinants of stock price), 3) To examine the effect of development, size of the organization, liquidity, leverage, profitability and dividend payment on stock prices. This study endeavors to examine the factors that affects on the stock prices. Hence, this research work conducted in order to obtain insight into these issues in accordance with the Kingdom of Bahrain's stock Market environment. Specifically, this study tries to answer the following inquiries: 1). What are the factors affecting the stock price? 2). what are the most affecting factors altering the stock price? 3). What are the least affecting factors altering the stock price? 4). what are the ranking assignments to the economical, political, interior, exterior and environmental determinants of stock price? Primary data were collected from 50 investors who are participated in the survey are stockbrokers by using structured Questionnaires containing determinants of stock price. Five points Likert scale utilized to examine and analyze the collected data. The study on determinants of stock prices shows that there are many factors determining prices of stock. The investors should be aware with these factors if they want to become successful investors. Out of these factors some factors shown to be critical and other factors shows to be of minor importance. On the whole a stock price is an outcome of entire economic, business and political situation. In this, study investors generally agreed upon the importance of these factors.

Acknowledgement

In the beginning, I would like to thank ALLAH the almighty, then my parents who gave me support throughout my life and anyone helped me to reach to this level.

However, I would like to give my sincere gratitude to my supervisor, Dr. Ahmed Gharaibeh for his constant support, advices and recommendations to complete this project.

Finally, I would like to thank all the respondents for their participated in this study.

Table of Contents

CHAPTER: 1 INTRODUCTION6

1.1 Introduction6

1.2 The study problem:7

1.3 Significance of the study:8

1.4 Aim and Objectives of the study9

1.5 Research questions:9

1.6 Methodology of the study10

1.7 Organization of the study:10

CHAPTER 2: LITERATURE REVIEW12

Bahrain Stock Market Development17

Main Characteristics: ...