Fundamental Analysis of Dhaka Stock Exchange (DSE) Listed Top Five NBFIs: A Study on Bangladesh

Abstract

Investment decisions are a part of most people's lives. In a unique situation, each person makes such decisions. Both technical and fundamental analysis can be used to make logical investing decisions. The goal of this study is to do fundamentals evaluation of Bangladesh's top five NBFIs, as listed on the DSE, determining the substantial difference between selected variables by comparing them side by side. Descriptive and inferential statistics are used by the researchers in this work. The authors took the top five NBFIs, IDLC, LankaBangla, ICB, BDFinance, and Prime Finance as a sample and used secondary data from 2015 to 2020. According to the findings of this study, IDLC and LankaBangla have the highest average ROEs of 19.35 and 13.61, respectively. Prime Finance has the lowest P/E ratio (10.75), followed by IDLC (10.75), LankaBangla (14.14), and ICB (10.86). The biggest dividend yields are 5.91 and 5.16 percent for LankaBangla and IDLC, respectively, followed by 1.60 percent for ICB and so on ICB, Prime Finance, and BD Finance have the highest dividend payout ratios (81.05) and IDLC has the second-highest dividend payout ratio (71.19). IDLC has the second-highest P/E ratio (2.13), while LankaBangla has the third-highest P/B ratio (1.48). Finally, in terms of earnings per share (EPS), IDLC has the greatest average EPS (5.72), ICB is second (3.09), LankaBangla is third (2.32), and so on. Alternative hypotheses (H1.1, H1.2, H1.3, H1.4, H1.5, and H1.6) have been accepted, indicating that significant differences exist among the variables studied. As a result, all of the chosen variables varied significantly. Ultimately, this research will assist investors in making informed investment decisions, and the management of the top five NBFIs will be able to perform better by following the proposed recommendations. Keywords: NBFIs, Fundamental analysis, ROE, EPS, P/B ratio, Dividend yield