Effect of corporate performance on the share price of Lusaka Securities Exchange (LuSE) firms: Case of ZCCM Investments

Abstract

Microstructure developments in the emerging capital markets, particularly in secondary markets, have taken place over the past two decades. One of the policy issues is how share prices are determined in the market. With ZCCM-IH as a test case, the study set out to see if corporate performance had any impact on the share price of publicly traded businesses on LuSE. The study’s objective was to investigate the impact of firm performance on share price. The study examined the data for a period of 10 years, from 2010 to 2020. When analysing the link between company performance and share price, the study used multiple regression analysis to quantify ROA, ROE, and NPM financial variables. LuSE-listed businesses were shown to have a positive correlation with factors such as return on equity, return on assets, and Net Profit Margin (NPM). This study has uniquely added to the existing literature in Zambia as no one has looked into the influence of ZCCM-IH's financial performance on LuSE share price before. The study recommends that ZCCM-IH and other companies listed on LuSE, they need to pay more attention to their ability to increase share price by always anticipating global economic conditions and free markets to increase their profits as well as shareholder value.