Analyzing the Effects of Fundamental and Technical Factors on Stock Prices: A Study on the Information Technology Sector of Dhaka Stock Exchange

Abstract

The purpose of this paper is to investigate and identify the main forces that may affect the stock prices of one of the emerging sectors, the information technology industry of Dhaka Stock Exchange. A total of 6 companies of IT industry have been picked for the study, for a quarterly dataset within a period of 2015 to 2022 for six factors, of which three belong to the fundamental factors named EPS, NAVPS and P/E ratio whereas other three belong to the technical factors termed GDP growth rate, Inflation rate and IRS. The investigation approach has been designed with ordinary least square regression, where multiple regression model analysis is made. The findings show that while fundamental factors have mentionable significance on the stock prices of IT sector, the technical factors are not found with noticeable significance. Thus, this research recommends both the existing and potential investors about the importance of fundamental analysis to take better understanding of this fast-growing industry of Dhaka Stock Exchange which is in its infancy.

Keywords

• fundamental factors
• technical factors
• information technology sector