Revista de negocios y asuntos financieros

Determinants of Stock Return for Non-Financial Sector: Evidence from Energy Sector of Pakistan

Abstract

Abbass K, Song H, Shah SM and Aziz B

This research aims to investigate the determinants of stock return for non-financial firms listed on Pakistan stock market. The firms which have been taken under consideration belong to the energy sector of Pakistan. This research has included two known variables which are firm level characteristics (firm age, firm size and firm Solvency) and macroeconomic factors of interest rate and economic growth. In this study, 22 companies out of total 35 companies have been taken for analysis purpose. The data has been taken for the period of 2006 to 2016. Empirical findings of the study revealed that there was a positive relationship between firm age and stock returns while firm size hasn’t shown any significant impact on stock returns. It has been found that there was a significant relationship between solvency ratio and stock returns. The results of the regression model confirmed that there was a negative relationship between solvency ratio and stock returns as well as between interest rate and stock price. The interest rate has also shown a statistically significant impact on stock returns. In addition to it, results also showed that there was a significant relationship between economic growth and stock return.