Question

with a minimum of 5 journal articles examine the determinants of share price in Ghana as compared to research in other developed country of your choice

Answer 1

1) Ghana has adopted International Financial Reporting Standards (IFRS) which requires that all companies present financial statement in line with IFRS.This is expected to improve information provision and investors’ understanding of operations of the entities and consequently performance of the firms.

2)

References

• Abuzayed, B., Molyneux, P., & Al-Fayoumi, N. (2009). Market value, book value and earnings: Is bank efficiency a missing link? Managerial Finance, 35, 156–179.10.1108/03074350910923491 [Crossref], [Google Scholar]
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• Armstrong, C. S., Barth, M. E., Jagolinzer, A. D., & Riedl, E. J. (2010). Market reaction to the adoption of IFRS in Europe. The Accounting Review, 85, 31–61.10.2308/accr.2010.85.1.31 [Crossref], [Web of Science ®], [Google Scholar]
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• 3) recommends that those interested in investing in stocks listed on the GES should moni-
  tor the performance of specific variables (earning price ratio; book to market value; return on equity;
  and market capitalization of the firm) before making a decision to expand their portfolio. Furthermore,
  the listed companies should focus their attention on improving the figures related to the significant
  variables that affect the market price of shares. As Ghana has adopted IFRS and it is also an emerging economy, this study will help investors in making rational decisions with regard to their stock portfolio
• 4) increasing return on equity, improvement in earnings per share and
  size of the firm in terms of market capitalization are likely to improve the market price of the share.
  This suggests that upward adjustment in these variables would lead to an increase in market price
  of the shares.
• explanatory variables presented in the model would explain about
  75% of the variation in the prices of the shares of listed firms on the Ghana Stock Exchange, and can
  be explained by the variable included in the model. The p-value of the F-test was also significant at
  1% level, which leads to the acceptance of the alternative hypothesis that states that all coefficients
  of the variables in the model are jointly not equal to zero. Hence, at least one of the explanatory vari-
  ables has a coefficient that is significantly different from zero. Out of the seven independent varia-
  bles, five are statistically significant. value of share, return on equity and Log of market capitalization) exhibit a positive and significant
  relationship with the market price of shares. The coefficient of the variables EPS, BVS ROE and market
  capitalization is positive, while the coefficient of DS and DY exhibits a negative relationship with the
  dependent variable, share market price.
• low liquidity level on the GSE is a major factor affecting investment decisions on it. As the extent of stock
  market development will predict its investment decisions, it follows that the relative low investment decisions on the
  GSE may be attributed to its level of development.
  The continuous stability of the Ghana economy is seen to have assisted in the investments made on the GSE, in the
  year under review, hence its development. The economy has progressively being supported by the continuous existence
  and performance of listed businesses through the finance provided through the exchange. The functioning of these listed
  companies on the exchange has supported the economy through the provision of jobs, firms performing their societal role
  in the provision of basic amenities for their communities.
  With the recent evolution of crude oil in Ghana and the subsequent listing of the Ghana Oil Company limited
  (GOIL) in November 2007, it is envisage that the successful development of the GSE will better support the economy.
  That is through the increasing investments that will take place on the Exchange from its developmen