Equity Price Determinants in Karachi Stock Exchange: Company Specific vs. Country Specific Factor Analysis from Pakistan

Purpose-The main purpose of present study is to investigate the equity price determinants through with the framework of both industry specific and country specific elements, by considering the major firms listed in the Karachi Stock Market at Pakistan from the time period to 2004-2008. Research Methodology-To ensure the deep understanding, in this study secondary data technique with the various statistical and econometric methods were used to test the hypothesis in order to satisfy the core objectives. Findings/Outcomes-Contemporary analysis explains that Equity prices of the shares have been determined by number of explanatory variables. Regression result analysis suggests that there is a significant positive relationship between the dividends, earnings per share while there is negative relationship between the stock price, Gross Domestic Product and Inflation in the economy. GDP has negative but significant association while inflation has negative and insignificant relationship with the stock price. Research limitations-This study has focused on very limited number of firm specific and industry specific factors. At second time period of the study is not much long. Implication of the study-Results of the present study is quite beneficial for the management and policy makers while determining the equity prices in the market economy. Findings are also quite sigfncaint for the local and international investors while they are going to make some capital investment decision in financial markets