Research Journal of Economics & Business Studies - RJEBS - The ...

and medium companies. Mazharul H. Kazi (2008) in his study “Stock Market Price Movements and
Macroeconomic Variables”, concluded that the future direction about the suitability of contemporary
empirical technique that is more efficient over the traditional methods for analyzing asset pricing and
its return generating process in any securities market Daferighe. Emmanuel E, Aje. Samuel O(2009) in
their study “An Impact Analysis of Real Gross Domestic Product Inflation and Interest Rates on Stock
Prices of Quoted Companies in Nigeria”, concluded that while a reduction in interest and inflation rate
resulted in increased stock prices, increased RDGP has a positive impact. Government should
therefore implement policies that will reduce inflation rate and improve the standard of living of its
citizens. Interest rate should be made moderate so as to encourage investment and transactions in
stock. Sulaiman D. Mohammad, Adnan Hussain (2009) in their study “Impact of Macroeconomics
Variables on Stock Prices: Emperical Evidance in Case of Kse”, concluded that the influence of
foreign exchange rate and foreign exchange reserve significantly affect the stock prices, while other
variables like IPI and GFCF are insignificantly affect stock prices..
3. SIGNIFICANCE OF THE STUDY
The study will enable the investors to understand the price fluctuations of equity stocks when
influenced by the macro-economic factors. It will help them to make investment decisions. The study
can be extended to reveal the investment pattern of investors relating to the price changes. It can also
be implemented to analyze the impact of the variations of the factors on the other company stocks of
different sectors.
4. OBJECTIVE OF THE STUDY
To determine the risk return relationship of the stock.
To study the relationship between the macro economic factors and the share price movements
To analyze the impact of the factors on the performance of the companies stocks.
To determine the performance of the sectors based on their returns.
5. METHODOLOGY
5.1 Type of research: The type of research used in this study is descriptive in nature
5.2 Sampling method: Stratified random sampling method is used for selecting companies from six
sectors.
5.3 Sample size: The analysis is done with 30 companies taken from 6 sectors (5 companies from each
sector).
5.4 Data collection method: Secondary data is used in this study and was collected from national
stock exchange website and various journals, reports, publications and historical documents.
5.5 Data Collection: The samples are selected from the following 6 industrial sectors 1)Automobiles,
2) Banking, 3) Information Technology, 4) Telecommunication, 5) Fact Moving Consumer Goods, 6)
Oil and petroleum
5.6 Statistical tools: The statistical tools used for the study are 1) Mean, 2) Standard deviation,
3)Regression, 4)Correlation, 5) Trend analysis
6. DATA ANALYSIS AND INTERPRETATION
Table 6.1 Risk Return analysis
Sector Company 2010 2011 2012
Risk Retur
n
Risk Return Risk Retur
n
Automobile Ashok Leyland 3.62 0.26 2.11 -0.048 2.61 0.56
www.theinternationaljournal.org > RJEBS: Volume: 02, Number: 09, July-2013 Page 35