Title

The deviation of market stock prices from intrinsic values: The Philippine case

Date of Publication

2017

Document Type

Bachelor's Thesis

Degree Name

Bachelor of Science in Management of Financial Institutions

Subject Categories

Finance and Financial Management

College

Ramon V. Del Rosario College of Business

Department/Unit

Financial Management Department

Thesis Adviser

Tomas Tiu

Defense Panel Member

Marycris Albao

Abstract/Summary

The Philippine stock market has grown in recent years. Together with this growth, negative perception on the stock markets due to shocks or stock market manipulation have surfaced and have historically created negative impacts on stock market prices and trading. Hence, the purpose of this study is to see if the intrinsic values derived from the dividends, cash flow, and book value per share reflects the stock price volatility in the market. The researchers hypothesize that there is deviation between the trading price and the intrinsic values of Philippine listed companies. With Stata 13, the researchers used the LSDV1 of the fixed effects model to estimate the intrinsic values of each firm for each year, then used these and market prices to determine deviation. The researchers found that there is high deviation overall given the negative skewness of the divergence rates. Market stock prices thus deviated from their fundamentals. Moreover, the researchers showed that the average divergence rates for the years 2010 to 2011 and 2013 to 2016 are negative, meaning that stocks in the Philippines Stock Exchange for these years are undervalued.

Abstract Format

html

Language

English

Format

Print

Accession Number

TU21871

Shelf Location

Archives, The Learning Commons, 12F, Henry Sy Sr. Hall

Physical Description

v, 116 leaves : illustrations ; 28 cm.

Keywords

Stocks--Prices--Philippines

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