External and Internal Value Drivers of Bank Shares in Ghana

The values or share prices of banks are influenced by the performance of macroeconomic variables, banking industry outlook as well as the operational and financial performances of banks. The objective of this book was to analyze the influences and predictive strengths of selected external and internal variables that may impact on the valuation of banks in Ghana. A non-experimental quantitative approach using multiple regression models based on the theory of Arbitrage Pricing Model (APM) was used as the research methodology. The population covered all publicly listed banks in Ghana but with more emphasis on Standard Chartered Bank (SCB) and Ghana Commercial Bank (GCB). The results showed that external variables may predict the valuation of SCB better than the valuation of GCB while internal variables may predict the valuation of GCB better than the valuation of SCB. The author recommends that investors should put more weight on analyzing internal factors when valuing a government owned bank. However, in valuing a foreign privately owned bank, more weight should be put on macroeconomic factors of the host nation.

Autorentext

Dr. Daniel Raziel Obeng-Okon is a Financial and Investment Management Consultant. He is the Founder and Executive Chairman of CIDAN Investments Limited with over 20 Years of experience in Corporate Finance. He also lectures Public Accounting and Financial Management at the Post Graduate level with various renowned universities.