تلخیص
The study examines the relationship between stock price and earnings-per-share
for firms listed on the Karachi Stock Market (KSE) of Pakistan. The paper
explores the phenomena of mean reversion which refers that the stock prices tend
to move towards their average price over time. The stimulus for studying the
phenomenon is the fact that less work has been conducted in emerging markets
such as Pakistan. The data has been extracted from Karachi stock exchange and
method used to find out relationship is random effect regression while using
panel data. The results indicate that there is positive and significant relationship
between the stock prices and earnings-per-share (EPS) which refers to the
existence of mean reversion process. In addition, stock prices look to change with
firm fundamentals, in the long-run and on average, but not essentially at the
similar proportion and this relationship can help an investor to predict the stock
prices with the help of earning per share.
Muhammad Abdul Basit Khan, Naimat U. Khan. (2016) Mean Reverting Phenomenon on Karachi Stock Market, Putaj Humanities And Social Science, Volume-23, Issue-1.
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