An empirical analysis of the predictability of stock returns using the Price Earnings Ratio and the Price - to - book Ratio - a case study of the Nairobi Stock Exchannge

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dc.contributor.authorNduku, Kimundi Gillian
dc.date.accessioned2016-03-02T14:08:04Z
dc.date.available2016-03-02T14:08:04Z
dc.date.issued2015-11
dc.descriptionSubmitted in partial fulfillment of the requirements for the Degree of Bachelor of Business Science in Financial Economics at Strathmore Universityen_US
dc.description.abstractThe purpose of this study is to establish whether the Return Performance of the Stocks listed on the Nairobi Stock Exchange is predictable using the Price Earnings Ratio and the Price-to-Book Ratio. The two multiples have been attested to provide a cross sectional explanation according to studies done by scholars ~n both developed, and emerging markets. The study mimics the approach used by Basu, 1977 (P /E), and Lakonishok et al, 1993 (P /B). The results found for the P /E Ratio suggest the ratio has weak predictability power of the Returns on the NSE. This is as compared to other studies in developed markets that have evidenced strong evidence on the dominance of value investing over growth investing. The P /B Ratio is however found to have conflicting effects on the returns in the NSE compared to empirical literature such that the high P /B stock portfolio evidenced a higher return over the low P /B stock portfolio.en_US
dc.identifier.urihttp://hdl.handle.net/11071/4283
dc.language.isoenen_US
dc.publisherStrathmore Universityen_US
dc.subjectEmpirical analysisen_US
dc.subjectPredictabilityen_US
dc.subjectStock returnsen_US
dc.subjectPrice Earnings Ratioen_US
dc.subjectPrice - to - Book Ratioen_US
dc.subjectNairobi Stock Exchange (NSE)en_US
dc.titleAn empirical analysis of the predictability of stock returns using the Price Earnings Ratio and the Price - to - book Ratio - a case study of the Nairobi Stock Exchanngeen_US
dc.typeOtheren_US
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