A study on the relationship of macroeconomic variables and financial ratios on stock prices of publicly listed oil exploration companies in the Philippine Stock Exchange for the period 2006-2010

• Main Authors: Cadiz, Venice, Cruz, Jonas, Lim, Peter, San Pedro, Arnina
• Format: text
• Language: English
• Published: Animo Repository 2011
• Subjects: Stocks > Prices > Philippines; Stock exchanges > Philippines; Macroeconomics > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/18415
• Institution: De La Salle University

This thesis paper wants to find out whether macroeconomic variables such as inflation rate, interest rate, foreign exchange rate and foreign direct investment, and performance ratios such as the current ratio, debt to equity ratio, and return on equity ratio affect the stock prices of publicly listed oil exploration companies in the Philippines namely: Basic Energy Corporation, Oriental Petrolelum and Minerals Corporation, Petron Energy Resources Corporation, PNOC Exploration Corporation, and The Philodrill Corporation. The paper studied these companies for the period 2006-2010. Certain models used to analyze the data were: fixed effects model, random effects model, Hausman specification test, Breausch-Pagan/Cook-Weisberg test, and GLS regression with heteroscedasticity. Through the models and tests done, the researchers found out that all macroeconomic variables significantly affect the stock prices of the oil exploration companies in the Philippines, while only one performance ratio, the debt to equity ratio, significantly affects the stock prices of the said companies. After reading this paper, the readers would understand more the importance of the macroeconomic variable and the companies' performance ratio to the stock prices of the companies most importantly if one is planning to invest in stocks of these companies.