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Sri Lanka Equity Forum » Stock Market Talk » factors affecting to share price

factors affecting to share price

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1 factors affecting to share price on Wed Feb 23, 2011 9:37 pm

micky

avatar
Manager - Equity Analytics
Manager - Equity Analytics
What are the factors affecting to price of a share?

how to catogorize it?

Like to have a full list.

Thanks experts

2 factors affecting to price of a share? on Wed Feb 23, 2011 9:40 pm

kiri

avatar
Manager - Equity Analytics
Manager - Equity Analytics
@micky wrote:What are the factors affecting to price of a share?

how to catogorize it?

Like to have a full list.

Thanks experts

yes. it is help to us. thanks

3 Factors Affecting Share Price on Wed Feb 23, 2011 9:57 pm

Antonym

avatar
Vice President - Equity Analytics
Vice President - Equity Analytics
1. Demand and
2. Supply

But, seriously - Share price is the general perception of the company's worth divided by the number of equity shares.

There are several ways to determine a company worth, the most popular ones being:
Discounted value of future cash flows and
Industry Earnings- and Growth-based approaches.

These values are supplemented by aspects like book value, dividend yield, quality of management and other aspects (too many to list). I suggest you get hold of a good book on the subject; I recommend 'How to Value Shares and Outperform the Market' by Glenn Martin.

4 Re: factors affecting to share price on Wed Feb 23, 2011 10:02 pm

Aamiable


Vice President - Equity Analytics
Vice President - Equity Analytics
To name a few other factors

Profits fundamentals. PEG etc.

Future prospects

Crowd behavior

Reputation of the company

Directors interests.

Liquidity

Past experiences.

Reliability of the business.

Growth potential.

Political and economical situations.

New developments

Bonus, large dividend, right issues.

Good news. Announcements Etc.

5 Re: factors affecting to share price on Wed Feb 23, 2011 10:06 pm

micky

avatar
Manager - Equity Analytics
Manager - Equity Analytics
@Antonym wrote:1. Demand and
2. Supply

But, seriously - Share price is the general perception of the company's worth divided by the number of equity shares.

There are several ways to determine a company worth, the most popular ones being:
Discounted value of future cash flows and
Industry Earnings- and Growth-based approaches.

These values are supplemented by aspects like book value, dividend yield, quality of management and other aspects (too many to list). I suggest you get hold of a good book on the subject; I recommend 'How to Value Shares and Outperform the Market' by Glenn Martin.

thank you, i think these all are internal factors. internal factors affecting to demand and supply.
???

6 Re: factors affecting to share price on Wed Feb 23, 2011 10:08 pm

micky

avatar
Manager - Equity Analytics
Manager - Equity Analytics
@Aamiable wrote:To name a few other factors

Profits fundamentals. PEG etc.

Future prospects

Crowd behavior

Reputation of the company

Directors interests.

Liquidity

Past experiences.

Reliability of the business.

Growth potential.

Political and economical situations.

New developments

Bonus, large dividend, right issues.

Good news. Announcements Etc.

Thank you, like to find more Smile

7 Re: factors affecting to share price on Wed Feb 23, 2011 11:04 pm

ONTHEMONEY


Manager - Equity Analytics
Manager - Equity Analytics
If we really worried on earning bags of money we should go for an illiquid counter.

That counter must not be over bought.

That counter should have a minimum CDS float to exercise and keep active of the particular stock.

Thus it will hard catch in rush.

It will give returns today as well as tomorrow.

There are few counters in CSE such as CFLB,LCEY,BFL,TAFL which we have experienced in past..

Just as I mentioned above;CONN has high potential of delivering better performance in comparison with other top hotels which prevails at High PE levels.

The illiquid nature push the price up in large gaps while High dividends are easy considering the liquidness.(Eg-Highly liquid JKH declared a Dividend of Rs 1/- per share today)

My strategy is different from others.

Diversification is low risk.we must buy or sell at a reason.


Gud Luck

8 Re: factors affecting to share price on Wed Feb 23, 2011 11:05 pm

ONTHEMONEY


Manager - Equity Analytics
Manager - Equity Analytics
Illiquid counters is always has high potential over deriving gains today and future..

It has the potential in splits,script dividends,high cap.gains,high dividends..

However we must consider the illiquid nature prior making the investments..such as CDS float,etc

Too far low quantity is risky..

Another stock i must mention which has a high potential growth is COCO Lanka Plc.It is very impressive in investment trust and agri business..The concerned CDS quantity is really attractive which has a high Dividend Yield,EPS..We will witness more positive reports on COCO..

At times these will derive returns in very very short run..

However some will need some time to climb..

Good example is DIMO and still below 10PE..

When you find a stock which is really potential all other factors start falling in love with it..

Gud Luck

9 Re: factors affecting to share price on Wed Feb 23, 2011 11:19 pm

smallville

avatar
Associate Director - Equity Analytics
Associate Director - Equity Analytics
As I see it; the most important factor that affects the value of a company is its earnings. Earnings are the profit a company makes, and in the long run no company can survive without that.

Earning Per Share (EPS) - Earning per share is the profit that the company has made per share on the last quarter. If a company produces results better than expected, the price jumps up. If its disappointing, then the price will fall.

Price/Earning Ratio - Price/Earning ratio or the P/E ratio gives you fair idea of how a company's share price compares to its earnings.

News - News play a major role when it comes to stock price. If there is a good news about the company which directly affecting the company, the prices may increase. while a negative press release can ruin the momentum.

Dividend Effect - We all love dividends, there are long term investors who take dividends as a valuable thing in their lives, they tend to hold shares for prestige even. However high dividend yield companies generally produce best results.

Fresh Issue Of Shares - If a company is issuing the fresh shares, then share prices will come down because the profit will be shared with more investors then before.

Bonus Issue - Bonus issue is additional shares given by the company to its existing shareholders. By doing so, the company is able to reinvest the dividend cash for better earnings growth.
In fact, this is another way for the company to maintain its share price at cheaper rate without splitting the stocks. Bonus issue is also a good way to reward long term stock investor.

Warrants Exercise - With warrants, you have the right to buy shares from a company after the exercise date at specified price. As a result, its earnings will be diluted as more shares are sharing the same earnings pie. In general, the share price drops the same proportion of the number of
exercised shares.

Company BuyBacks - This is when the company buys back its own shares. As the number of shares decline, the company’s earnings will be distributed to fewer investors.

Crowd Psychology - There are stock specific factors as well and how the crowd generally look at a counter is also valuable to understand.

Nobody really knows for sure all factors affecting share price. But at the most fundamental level, supply and demand in the market determines stock price.

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