Tác động của cổ đông lớn, sở hữu nhà nước đến thị giá cổ phiếu của các công ty niêm yết trên sở giao dịch chứng khoán Việt Nam – trường hợp các công ty lĩnh vực hàng tiêu dùng thiết yếu

Nội dung text: Tác động của cổ đông lớn, sở hữu nhà nước đến thị giá cổ phiếu của các công ty niêm yết trên sở giao dịch chứng khoán Việt Nam – trường hợp các công ty lĩnh vực hàng tiêu dùng thiết yếu

1. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 IMPACT OF LARGE OWNERSHIP, STATE OWNERSHIP ON SHARE PRICE OF LISTED COMPANIES IN VIETNAM STOCK EXCHANGE – CASE STUDY OF ESSENTIAL CONSUMER GOODS FIRMS TÁC ĐỘNG CỦA CỔ ĐÔNG LỚN, SỞ HỮU NHÀ NƯỚC ĐẾN THỊ GIÁ CỔ PHIẾU CỦA CÁC CÔNG TY NIÊM YẾT TRÊN SỞ GIAO DỊCH CHỨNG KHOÁN VIỆT NAM – TRƯỜNG HỢP CÁC CÔNG TY LĨNH VỰC HÀNG TIÊU DÙNG THIẾT YẾU Pham Tien Manh Banking Academy manhpham@hvnh.edu.vn ABSTRACT This research using data of 27 essential consumer goods firms which are listed on Ho Chi Minh Stock Exchange (HOSE) from 2011 - 2018 in Vietnam, with variables related to ownership structure, to investigate the effect of different ownership structure characteristics on these firms’ market price. By using OLS, REM, FEM model, the results show that, the variables relate to the large shareholders, the company’s size and rate of return on total assets significantly impacted on the stock market price. Particularly, large shareholder variables, company’s size and variable rate of return on total assets have been shown the positively impact on the share price. Keywords: Share price, large shareholder, state ownership, firm size, return on total assets. TÓM TẮT Nghiên cứu này sử dụng dữ liệu của 27 công ty lĩnh vực hàng tiêu dung thiết yếu đang niêm yết trên Sở giao dịch Chứng khoán TP. Hồ Chí Minh (HOSE), giai đoạn 2011 - 2018, với các biến nghiên cứu liên quan đến cấu trúc sở hữu của doanh nghiệp, nhằm tìm ra tác động của các đặc tính cấu trúc sở hữu đến thị giá cổ phiếu của các công ty này. Nghiên cứu này sử dụng mô hình OLS, REM, FEM để kiểm đinh, kết quả nghiên cứu cho thấy, các biến liên quan đến cổ đông lớn, quy mô công ty, tỷ số lợi nhuận trên tổng tài sản (ROA) có tác động đến thị giá cổ phiếu; cụ thể, biến cổ đông lớn, quy mô công ty và ROA có tác động tích cực đến thị giá cổ phiếu của các công ty nghiên cứu Từ khóa: Thị giá cổ phiếu, cổ đông lớn, sở hữu nhà nước, quy mô doanh nghiệp, tỷ số lợi nhuận trên tổng tài sản. 1. Introduction Share price movement is always attracting investors and businesses during investment process. In addition, ownership structure in enterprises also affects the share price through impact on management and corporate governance. Currently, the share price of enterprises in the field of essential consumer goods such as food, cosmetics, leverage and so on tends to grow strongly and these groups have relatively stable and less sensitive to the economic cycle. Stocks of essential firm in services industry which have large market capitalization leading the market and their prices greatly effect to share prices. Therefore, investors are particularly interested in the share price in this industry when the stock market and the economic cycle grow, the recession cycle. The target of this research is to find the answers to the questions: (1) Does the board of director’s ownership affect to the share price? (2) Does the rate of state’s ownership affect the share price? (3) Does major shareholder of the company affect the share price? This study research used econometrics models to quantify the influence of factors affecting share prices. We have studied and used 7 elements divided into 2 groups: type of ownership (independent variables), including the total ownership proportion of firms’ board of director, the state’s ownership, the ownership proportion of major shareholders of companies under the research. Second, group of company 69
2. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 attributes (control variables) include: company’s size, financial leverage of the company, rate of return on total assets and number of company establishment’s year. This research includes the following sections: (1) Research background and hypothesis development; (2) Methodology, data and research models; (3) Research results; and (4) Conclusions and recommendations. 2. Research background and hypothesis development Theoretically, the ownership structure in the enterprise reflects overall the relationship of interests and responsibilities for the contributed capital of the owner, thereby determining other relationships in production and relations of products distribution as well as economic benefits which are brought by production and business processing. Regarding the impact of ownership structure on stock price, there are huge of researches related to this topic with many different points of view. Alipour and Amjadi (2011) analyzed the impact of different aspects of ownership structure such as individual shareholders or large shareholder, internal shareholders or external shareholders, concentrated ownership or institutional ownership to the stock prices of companies listed on the Tehran stock exchange. The result indicated that the largest shareholder has much impact on the stock price, and companies’ stock price with a lower percentage of shares held by individual shareholders. Besides, the rest variables have no relationship to stock prices. Research by Alexandru et al. (2013) has developed models to measure the stock prices of 51 Jordan’s companies from 2005 to 2009. The two research models were Ordinary Least Square method (OLS) and Seemingly Unrelated Regression method (SUR). The result shows that there is no significant relationship between individual shareholder and institutional shareholders to the stock prices, this means two variables do not affect stock prices much. There have been many researches around the world about this topic, however, in Vietnam, there are not much researches about this topic. (Phuoc, 2017) (2017) used data of listed companies in Vietnam in the period of 2009-2016, with description statistical method, the author has analyzed quantitative data with dependent variable to measure the performance of the companies, and the result shows that, enterprises have higher ownership will affect the firm value and lead to higher performance. Besides, stock is a type of securities that is simply understand as the ownership certification of the amount of capital, which investors contribute to the issuing company when buying shares. The stock price index can be influenced by various factors such as the domestic and oversea economic situations, the company’s business performance, market volatility, reputation and potential of the company. This research is going to develop hypothesis related to ownership structure and impact on stock prices. Firstly, the board of director ownership is one of the factors that have the greatest impact on the stock price of enterprises. Morey et al. (2008) have shown that an enterprise with board of directors hold high percentage of firm proportion will have higher firm value than others. Meanwhile, Obradovich et al. (2012), Rouf (2011) have concluded that board of director with small amount of company’s proportion will show the lower the value of enterprises, leading to the enterprises’ stock prices will decrease. H1: Board of director hold high proportion of shares in the enterprise will positively impact on stock price of listed firms in Vietnam Secondly, State ownership also affects stock market prices. According to research by Ben-Nasr and Cosset (2014), high state ownership often leads to a less transparent corporate information environment. This makes it more difficult to collect information of specific companies. Research by Hue, (2016) assessed the impact of state ownership on the stock prices of listed companies on Vietnam stock market has resulted in state ownership have a positive effect on share prices. 70
3. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 H2: State ownership has negatively influence to stock price of listed firms in Vietnam Thirdly, large shareholder is also investigated that affects stock prices. Two studies by Brockman and Yan (2009) and (Lam, 2016) shown that large shareholders in the company help improving corporate governance and increasing the quality of public information. So that it has a positive impact on stock prices on the stock exchange. H3: Large shareholders have positively impact on stock price of listed firms in Vietnam In addition, this research also used control variables to find out the relationship between them and stock price of listed firms in Vietnam. The company’ size is one of the variables affecting the stock prices. Research by Sharif (2016) has shown that company’ size has a positive impact on stock prices. This means large enterprises with financial potential as well as high competitiveness and high reputation in the market will easily mobilize large amounts of capital from investors with high stock prices. Regarding to financial leverage, there are a number of different views on the impact of the financial leverage on stock prices, focusing on 3 opinions. The first view is that the impact of financial leverage is negligible, as the results of Heydarreza (2010) on the impact of financial indicators on food industry enterprises. The second view on financial leverage is a factor that has a positive influence on stock prices, according to the research results of Kohansal et al. (2013), indicating that the effects come from the financial leverage of the food industry has a significant influence on stock prices. The third view shows that financial leverage has a negative impact on stock prices. Specifically, Kohansal et al. (2013) emphasizes that the lower the financial leverage, the higher the value of the company. The rate of return on total assets (ROA) is also considered by many studies to affect stock prices. Based on the value of profitability, people can know how many co-profits a company co-produces, the higher the ROA, the more effective it will be to use the asset. According to Idawati and Wahyudi (2015), ROA has a positive relationship and significantly impact on stock prices. 3. Methodology, data and research models Methodology This research combines qualitative and quantitative methods to build and run models based on panel data. The multiple-regression with the Ordinary Least Squares method (OLS), Fixed Effects Method model (FEM), Random Effects Method model (REM), Hausman test model. Data analysis This research collected secondary data, with the sample data focus on 27 enterprises in the field of essential consumer goods, which are listed on Ho Chi Minh Stock Exchange (HOSE) in Vietnam, in the period 2011-2018. Over the 8-year period under the research, the total number of research samples of 27 enterprises, which is officially used in the research paper, is 216 samples. All data such as financial Statements, annual reports, prospectus are taken from the company website. Turning to share price data, the price and the volume are taken from the website of Ho Chi Minh Stock Exchange (HOSE). Models The offered model of the group focuses on developing and testing the factors, which affect the dependent variables: share price, including 7 variables divided into 2 groups: group of factors of ownership types (independent variables) and group related to the company attributes (control variables). Based on the study of models related to the impact of ownership structure and stock price, determine the relevant influencing factors, consistent with the economic environment characteristics in Vietnam, the group chooses 7 variables. Independent variables are owned variables, control variables are variables that effect the business performance of the company, the dependent variable is stock price. 71
4. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 Table 1: Calculate variables The variables Symbol Method of measurement Dependent Variables Share price PRI Average price in the year Independent Variables Board of director BDO ownership State shareholder1 STA Large shareholder 2 of the company ENT Control Variables Company size Log (Total Assets) SIZE Financial Leverage LEV Return on Assets ROA Number of years in YEAR 2018 – Founded year operation Research Model: PRIi,t = β0 + β1BDOi,t + β2STAi,t + β3ENTi,t + β4SIZEi,t + β5LEVit + β6 ROAi,t+ β7YEARi,t + Ɛ Which: β0: Block coefficient; β1, β2: Coefficients; Ɛ: Error; i: enterprise i; t: year t 4. Research results Descriptive data The descriptive statistics table shows an overview of stock price movements over the last 8 years as well as factors that affect stock prices listed on HOSE. In total 27 listed firms under the research, there are 18 state shareholder firms and 9 non-state shareholder firms. Table 3 shows that the average share price of 27 companies in the period of 2011-2018 is VND 31,582.02, with a standard deviation of VND 29,229.46. Besides, the share price of enterprises has a big gap from VND 2,090 to VND 208,600. For the leading companies in the industry, stock prices are often much higher than small and medium enterprises so the share price difference of more than VND 200,000 reflects the operating situation of companies. 1 Ownership ratio above 5%. 2 Ownership ratio above 5%. 72
5. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 Table 2: The number of state shareholder firms and non-state shareholder firms Firm type The number of firms State shareholder firms 18 Non-state shareholder firms 9 Total firms 27 Table 3: The Descriptive statistics for all the variables for period Variable Obs Mean Std. Dev. Min Max PRI 216 31582.02 29229.46 2090 208600 BDO 216 0.3742726 0.2372444 0 0.8657 STA 216 0.5833333 0.4941518 0 1 ENT 216 0.6481481 0.4786573 0 1 SIZE 216 12.09294 0.6496592 10.2735 13.86356 LEV 216 2.389623 1.89511 0.0440062 11.28056 ROA 216 0.07593 0.1045147 -0.6455064 0.7836998 YEAR 216 15.2963 6.141372 8 40 In addition, based on Table 3, we can make assessments of independent variables - factors affecting stock prices through mean, standard deviation and volatility range. Specifically, with the independent variables, the total average ownership ratio of the Board members (BDO) is 37.42726% with a standard deviation of 23.72444% and a very large fluctuation range of up to 86.57%. This suggests that the average membership of the Board of Directors owns a large share of the company, which will affect the company's executive decisions. In addition, the state ownership and major shareholders of the company accounted for a very high proportion of 58% of the company, it will greatly affect the company's operation plan. For control variables, the average index of scale, financial leverage, net profit on total assets, the number of years of establishment of enterprises is at an average level, indicating that most of the companies in this sector operates effectively, the structure of using capital and assets is relatively stable, after-tax profit grows steadily over the years. The average number of years established over 15 years, which shows the essential consumer goods enterprises have been born for a long time and are still developing steadily. Regression model results Correlation Test (Correlation) Based on the table of correlation matrix below, it is generally shown that the correlation between most variables is relatively low. However, the correlation coefficients between PRI and the variables of ENT and ROA are quite high with values of 52.17% and 55.03% respectively. However, this model is still suitable because the correlation coefficients of all variables are less than 80% so this model is meaningful. Therefore, the research results show that most of the variables in the model do not have a correlation relationship with each other, and this will be a positive sign in testing and selecting appropriate econometric models. 73
6. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 Table 4: Correlation matrix between variables in the model PRI BDO STA ENT SIZE LEV ROA YEAR PRI 1 BDO -0.0388 1 STA 0.2344 0.0245 1 ENT 0.5217 0.0361 0.2032 1 SIZE 0.3116 -0.1172 0.2714 0.2088 1 LEV -0.2797 0.2370 0.0638 -0.2464 0.1166 1 ROA 0.5503 0.0028 0.1838 0.2242 0.1650 -0.3534 1 YEAR 0.0958 -0.0284 -0.0128 0.2492 -0.2738 -0.3469 0.0974 1 4.2.2. Multivariate linear regression model (OLS) Table 5: Results of multivariate regression model Source SS df MS Number of obs = 216 Model 85.5810463 7 12.2258638 F (7, 208) = 29.55 Prob > F = 0.0000 Residual 86.0433756 208 0.413670075 R – squared = 0.4987 Total 171.624422 215 0.798253125 Adj R – squared = 0.4818 Root MSE = 0.64317 PRI Coef. Std. Err. t P > |t| [95% Conf. Interval] BDO -0.0852088 0.1959698 -0.43 0.664 -0.4715506 0.3011329 STA 0.0810356 0.0949468 0.85 0.394 -0.1061458 0.2682171 ENT 0.7069257 0.1033827 6.84 0.000 0.5031135 0.9107379 SIZE 0.2088329 0.0780336 2.68 0.008 0.0549948 0.3626711 LEV -0.029484 0.028157 -1.05 0.296 -0.0849937 0.0260256 ROA 3.521255 0.4716951 7.47 0.000 2.591339 4.451171 YEAR -0.0027548 0.0081489 -0.34 0.736 -0.0188198 0.0133103 _cons 6.830079 0.9672996 7.06 0.000 4.923111 8.737047 Based on the results of Table 5, the coefficient of determination of R-square is 0.4987 (49.87%) and the adjusted R-square is 0.4818 (48.18%). These two R values are used to measure the suitability of the regression model. The closer , the better the model is built to fit the regression data. Besides, shows that in 100% of stock price volatility, 49.87% is due to 7 factors in the model, and 50.13% is due to random factors and other factors not in the model. Thus, both R values are close to 50%, indicating that the PRI dependent variable is explained by independent variables of nearly 50%. Besides, the table 5 above results show us which variables have an impact on stock prices. Looking at p-value, it shows that most of the independent variables in ownership structure do not affect the share price because they are larger than 0.05. In particular, there are 3 variables having the same directional impact on share price which are ENT, SIZE and ROA. 74
7. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 Table 6: Results of multicollinearity testing Variable VIF 1/VIF LEV 1.48 0.675732 SIZE 1.34 0.758654 YEAR 1.30 0.768218 ENT 1.27 0.785725 ROA 1.26 0.791658 STA 1.14 0.874046 BDO 1.12 0.890113 MEAN VIF 1.27 In general, all the variables of the model in the study have a magnification coefficient of variance VIF less than 10. Moreover, the coefficients are only between 1 and less 2 and the average of all 7 variables is 1.27. Therefore, the variables in the model do not have multicollinearity phenomenon. Fixed Effects Model (FEM) Table 7: Result Fixed Effects Model (FEM) Fixed-effect (within) regression Number of obs = 216 Number of groups = 8 R-sq: Obs per group: Within = 0.5019 Min = 27 Between = 0.2946 Avg = 27.0 Overall = 0.4989 Max = 27 corr(u_1, Xb) = -0.0011 F(7,201) = 28.93 Prob > F = 0.0000 PRI Coef. Std. Err. t p>|t| [95% Conf. Interval] BDO -0.0527041 0.2065747 -0.26 0.799 -0.4600357 0.3546274 STA 0.0931247 0.1045448 0.89 0.374 -0.1130206 0.29927 ENT 0.7039567 0.1047082 6.72 0.000 0.4974891 0.9104242 SIZE 0.2093936 0.0801467 2.61 0.010 0.0513573 0.3674299 LEV -0.0233093 0.0286812 -0.81 0.417 -0.079864 0.0332453 ROA 3.558703 0.4918842 7.23 0.000 0.588788 4.528618 YEAR -0.002034 0.0082064 -0.25 0.804 -0.0182157 0.0141467 -cons 6.777382 0.9900703 6.85 0.000 4.825125 8.729639 Sigma_u 0.1048096 Sigma_e 0.64655175 0.02560533 (fraction of variance due to u_i) Rho F test that all u_i=0: F(7, 201) = 0.69 Prob > F = 0.6803 75
8. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 First of all, we ran the FEM model on Stata software based on panel data. When considering the FEM model, it is appropriate to test variables when P-value coefficient is less than 0.05 (5%). Based on the results of the FEM model running on Stata, the value of p-value = 0.6803 (68.03%) is greater than 0.05. Therefore, the random impact model is a model that is not statistically significant with the data set. If the statistically significant model results in three major shareholder variables (ENT), company scale (SIZE) and return on total assets (ROA) all affect the same side variable to share price (PRI) like the OLS model. Random Effects Model (REM) Next, to see clearly which variables affect the dependent variable, research is based on the p-value of each explanatory variable. The results are similar to the results of the OLS regression model and the FEM model, which are three major shareholder variables (ENT), company scale (SIZE) and return on total assets (ROA) all affect the stock price (PRI). Moreover, if the regression coefficient β of these variables is greater than 0, the variable acts in the same direction and vice versa. Through the results table, the group found all three variables have the same effect on the dependent variable PRI. Therefore, three variables ENT, SIZE, ROA can explain the change of PRI variable. Table 8: Result Random Effects Model (REM) Random-effects GLS regression Number of obs = 216 Number of groups = 8 R-sq: Obs per group: within = 0.5016 min = 27 between = 0.3314 avg = 27.0 overall = 0.4987 max = 27 Wald chi2(7) = 206.88 corr(u_i, X) = 0 (assumed) Prob>chi2 = 0.0000 PRI Coef. Std. Err Z p> │Z│ [95% Conf. Interval] BDO -0.0852088 0.1959698 -0.43 0.664 -0.4693027 0.298885 STA 0.0810356 0.0949468 0.85 0.393 -0.1050567 0.267128 ENT 0.7069257 0.1033827 6.84 0.000 0.5042994 0.909552 SIZE 0.2088329 0.0780336 2.68 0.007 0.0558899 0.361776 LEV -0.029484 0.028157 -1.05 0.295 -0.0846707 0.0257026 ROA 3.521255 0.4716951 7.47 0.000 2.59675 4.445761 YEAR -0.0027548 0.0081489 -0.34 0.735 -0.0187264 0.0132168 _cons 6.8300790 0.9672996 7.06 0.000 4.934207 8.725951 sigma_u 0 sigma_e 0.64655175 Rho 0 (fraction of variance due to u_i) 76
9. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 Select the appropriate model by testing Hausman Test After testing two models of FEM and REM, we found that the REM model was more relevant and statistically significant than the FEM model. However, to ascertain the most accurate and accurate model of the data set, the team ran the Hausman test with two hypotheses. H0: REM Random Effects Model. H1: FEM Fixed Effects Model. If the p-value is less than 5%, we reject H0, accept H1. Conversely, if p-value is greater than 0.05 (5%) then we have no basis to reject H0, therefore, H0 is accepted. The result of table 9 shows that p-value equals 0.9693 (96.93%) greater than 0.05, we accept the hypothesis H0 given. The model of random effects is the most suitable model to choose research. Therefore, the research team selected REM random effects model to test the model and get the results of REM model to draw conclusions and recommendations. Table 9: Test results of Hausmn test Coefficients (b) (B) (b-B) sqrt (diag(V_b-V_B)) Fe re Difference S. E. BDO -0.0527041 -0.0852088 0.0325047 0.0653371 STA 0.0931247 0.0810356 0.0120891 0.0437576 ENT 0.7039567 0.7069257 -0.002969 0.0166084 SIZE 0.2093936 0.2088329 0.0005607 0.0182827 LEV -0.0233093 -0.029484 0.0061747 0.0054584 ROA 3.558703 3.521255 0.0374474 0.1394769 YEAR -0.002034 -0.0027548 0.0007208 0.0009695 b = consistent under Ho and Ha; obtained from xstreg B = inconsistent under Ha, efficient under Ho; obtained from xtreg Test: Ho: difference in coefficients not systematic chi2 (7) = (b-B) ' [ (V_b-V_B) ^ (-1) ] (b - B) = 1.82 Prob>chi2 = 0.9693 According to the results obtained from the REM models above, we synthesized the table of hypothetical test results (Table 10). As shown in the table below, in the 7 research factors was selected, there are 3 factors that are major shareholders (ENT), company scale (SIZE) and return on total assets (ROA) has an impact on stock price (PRI). 77
10. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 Table 10: Summary of test results of assumptions Variable name Impact direction Group of factors of different types of ownership in the company (Independent variables) Board of director ownership (BDO) No effect State ownership ratio (STA) No effect Major shareholder of the company (ENT) Positive Group elements of attributes in the company (Control variable) Company scale (SIZE) Positive Financial Leverage (LEV) No effect Return on total assets (ROA) Positive Number of years of establishment (YEAR) No effect As can be seen from Table 10, the firms which have large shareholder have positive impact on the stock price. This means, when there is the participation of large shareholders, the stock price has a positive change and vice versa. For control variables, firm size (SIZE) also has the same directional impact on stock prices. The larger the scale of the business, the higher the share price and vice versa. This is in line with the research paper of Sharif (2016) which assumes that the firm size has a positive impact on share prices. For the return-to-asset ratio (ROA) variable, the results show that ROA has a positive impact on PRI. When profits increase, then stock prices will rise and vice versa. This result is consistent with the research hypothesis, that firms have high profits indicate that these companies is doing well, and the dividend rate is also higher, which makes investors expect stock prices to increase in the future. 5. Conclusions and recommendations Conclusions Our study show that large shareholders have a positive impact on stock prices. Similar to the research results of Brockman and Yan (2009), it showed that the large shareholders of the company improve corporate governance problem and increase the quality of published information, which impacting positively to share price. The research results also show that control variables of Company size having a positive impact on stock prices. This result is similar to the research of Sharif (2016), the research of Chaudhary and Nishat (2002), this means, large-scale enterprises or expanding the size into more industries, having great financial ability as well as great competitiveness will be hard to be defeated economically, consolidated the reliability and high reputation in the market so it will be easier to mobilize a large amount of capital from investors with high stock price. 78
11. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 In addition, return on total assets (ROA) has a positive impact on stock prices. When ROA of company increases, the stock price will also rise and vice versa. This result is consistent with hypothesis that the higher ROA, higher profits, the company uses assets more effectively. This result is similar to the research of Kartika et al. (2018) that the higher the ROA, the better for the company. Saeidi and Okhli (2012) also conclude that ROA has a high correlation with stock prices at all of industry’s level and it can be used as the main efficiency factor affecting stock prices. Recommendations Research results about the impact of ownership structure on stock market are quite useful for the related objects to have suitable solutions or decisions, especially for regulatory agencies, companies and investors. * For enterprises Firstly, enterprises need to attract investors, shareholders who are huge organizations with experience in managing and operating company. This will improve the reliability of corporate’s information of the stock price, therefore reduce the negative impact on stock prices and increasing investor’s trusty. Secondly, corporations should have a clear directions and strategies for each step of development and expansion of their business, focus on the development of product quality on a single field. After creating a well position, gaining the trust of customers and investors, the company can expand scale to another field or industry with a suitable and strict management. In addition, firms should avoid investing in many fields but unprofitable will reduce the value of the corporate's stock. Thirdly, firms should provide accurate information on their financial statements about their business situation in recent years to create a trusty believe for investors. When companies' return on total assets grows steadily over the years, investors will prioritize investing in that stock, helping stock prices increase. Corporations need to set specific targets for production and revenue in the future, so that they can determine the number of machines or materials needed to achieve the goal, avoid unreasonable use of assets, avoid buying too many materials or great value assets. If the corporate's ROA is lower than the previous year due to scaling up, buying more machines but not yet gaining profits, the corporate should also specify in the explanation or give a detailed notice to analysts, investors understand. * For the investors Firstly, investors need to care about corporate governance factor to determine which corporates are owned by which individuals or organizations. If corporate have large organizations owned, investing in corporate is good. Therefore, when investors care about firm’s stocks, they should consider the major shareholders in the company. Secondly, investors should consider selecting large company size because the bigger companies, the higher the capitalization demand to create a good effect on the corporate's business performance, which means this corporate has a good financial position (equity ratio is greater than 1 compared to loan capital, the proportion of equity in total investment capital is greater than or equal to 50%) as well as develop and compare in many different industries. Thirdly, investors should carefully consider the information published by the corporate before investing in one or more types of stocks. When considering, investors should pay special attention to the performance of corporates, like performance indicators, especially return on total assets (ROA) to see if the corporate doing effectively business. If the company has ROA increase, it should be invested. However, it is necessary to carefully analyze whether the increase in ROA is due to which factors, sometimes due to the company falsifying the data. A company with reduced ROA is not sure if the company is doing poorly and inefficiently, but that the size of the company's factory is expanding so the total assets increase while the profit has not been recovered, or because the price of input materials is 79
12. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 expected to increase, so the company buys to accumulate, making the inventory increase and so the assets increase. Therefore, investors need to accurately calculate the ROA and determine the cause of an increase or decrease in ROA, making the correct choice in investment. * For the regulatory agencies Firstly, the results from the research show that major shareholders of the company have a positive impact on share price. Market managers may offer solutions or policies that increase the concentration of ownership of large shareholders in public listed companies, with more corporate investors investing in the company can also bring benefits to the company and create trust for investors. Therefore, regulators can create opportunities for companies by making requirements on the ownership rates of major shareholders in companies, as a result, this can increase stock prices. Secondly, the size of the company has a positive impact on stock prices. Policymakers should have specific requirements for corporates which they want to expand their scale or develop new industries must ensure that, there are clear research and specific development strategies to avoid inefficient business. Thirdly, the results of the research show that the company's ROA has a positive impact on stock prices. However, there are many cases of companies falsifying information on financial statements to cover up the company's loss or overrunning profit indicators to attract investors' investment. Therefore, the Ministry of Finance and the State Securities Commission in Vietnam should have a strict monitoring mechanism and coordinate with related organizations to measure and evaluate the quality of information given by public listed companies, like unexpected inspection or specific sanctions for violations. Therefore, this will help the users when using information will make more accurate decisions. REFERENCES [1] Alexandru, M., Obreja, L., Allen, D., Rachim, V., Baskin, DeAngelo, Zulkifli, A. H. (2013). Dividend policy and share price volatility: UK evidence. The Journal of Risk Finance, 12(1), 1–8. [2] Alipour, M., & Amjadi, H. (2011). The Effect of Ownership Structure on Corporate Performance of Listed Companies in Tehran Stock Exchange: An Empirical Evidence of Iran. In International Journal of Business and Social Science (Vol. 2). Retrieved from www.ijbssnet.com [3] Ben-Nasr, H., & Cosset, J. C. (2014). State Ownership, Political Institutions, and Stock Price Informativeness: Evidence from Privatization. Journal of Corporate Finance. [4] Brockman, P., & Yan, X. (Sterling). (2009). Block ownership and firm-specific information. Journal of Banking and Finance. [5] Chaudhary, M. I., & Nishat, M. (2002). Key Fundamental Factors and Long-run Price Changes in an Emerging Market—A Case Study of Karachi Stock Exchange (KSE). The Pakistan Development Review, 41(4II), 517–533. [6] Heydarreza, H. and G. (2010). Rate of return on assets and rate of return on equity and financial leverage on Stock prices of companies listed in Tehran Stock Exchange. Payam Nour University. [7] Hue, N. T. M. (2016). Ảnh hưởng của sở hữu nhà nước đến sự đồng biến động giá cổ phiếu của công ty niêm yết trên thị trường chứng khoán Việt Nam. Tap Chi Kinh Te va Phat Trien, 4(256), 58–65. [8] Idawati, W., & Wahyudi, A. (2015). Journal of Resources Development and Management www.iiste.org ISSN. In An International Peer-reviewed Journal (Vol. 7). Retrieved from www.bakrieglobal.com. 80
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