Overview

Study on trends in share prices and factors influencing it with reference to banking and manufacturing sector has been studied. The companies were selected based on the market capitalization. The study covered ten years from 2006 to 2015. Financial tools were used in this study viz. logarithmic returns, runs test, variance and paired t- test were used in measuring the impact of these events in relation to the share price. Returns and variance were used to measure the dividend impact, Runs test to measure stock split and paired t-test to measure the impact of bonus shares. Increasing trend was noticed in many banks and manufacturing companies from 2006 to 2015 (Axis bank, HDFC bank, Indusind bank, yes bank, ITC and Maruti), while the remaining companies exhibited a mixed trend. However no decreasing trend was noticed during these years. With regard to dividend announcement, significant difference in returns was noticed in all companies. Dividend increase was noticed in all companies in all the years. However some companies exhibited a positive trend before the effective date (dividend date) followed by negative returns after the event, while some companies exhibited positive returns before and after the event and the returns were statistically significant. Most of the companies had gone for stock split and issue of bonus shares. The banking companies had gone for stock split, while the manufacturing companies had gone for issue of bonus shares. The main objective was done to keep the share prices at attractive level so that all class of investors have the affordability to buy.

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9784892116087

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