Analysis of Factors Affecting Securities Prices of Banks

The paper presents a research of the relationship between the share prices of commercial banks and a number of factors that may affect them. The result of the research is a number of regression models, which allow us to evaluate the influence of chosen factors on the bank share price and to reveal certain regularities in the interrelation between them. The main goal of the study is to identify the internal and external factors that can affect the stock price of the commercial banks and evaluate their possible effect on the share prices of these banks. The main objectives of the research are: • to define the terms «securities» and «stock»; • to define the role of securities in the commercial banks activity; • to analyze the formation process of the share market price; • to identify macroeconomic factors and bank financial indicators that can affect the share price; • to conduct a regression analysis and thereby to estimate the relationship between the commercial banks share prices and the mentioned above factors. As the result of conducted research, the following results were obtained. Factors that positively affect the prices of bank shares: the price of oil, the capital adequacy ratio, the return on capital. Negative impact on the share prices of banks have the following indicators: the level of inflation and the reverse exchange rate. The money supply M2, the size of assets and the equity turned out to be insignificant variables. Therefore, they do not exert influence on the stock prices of banks.