CASH DEPOSITS AND MARKET VALUE OF COMMERCIAL BANKS LISTED IN NSE IN KENYA
Donald, M. K. - Masters of Business Administration – Finance Student – School of Business and Entrepreneurship, Jomo Kenyatta University of Agriculture and Technology, Kenya
Matanda, J. W. - Lecturer, School of Business and Entrepreneurship, Jomo Kenyatta University of Agriculture and Technology, Kenya
Kimani E. M. - Lecturer, School of Business and Entrepreneurship, Jomo Kenyatta University of Agriculture and Technology, Kenya
ABSTRACT
Market value measures the value of a commercial bank's shares in the securities exchange market. Commercial banks' market value allows them to provide credit and loans to both individuals and corporations. Commercial banks can encourage financial inclusion and deepening for their clients, consumers, and businesses nationwide by using their market value. Nonetheless, the market value of commercial banks in Kenya has significantly decreased. This study's main objective was to determine the effect of cash deposits on market value of commercial banks listed in NSE in Kenya. The theory that underpinned this study was the cash conversion cycle theory. A descriptive research methodology was used to carry out the investigation. The investigation’s target population was eleven profitable banks listed in the NSE in Kenya. The study's eligible population consisted of 11 profitable banks. The study used census survey strategy for sampling. A secondary data collecting sheet was used to gather secondary data. To facilitate entry, data was coded, checked, and referenced. The statistical package of the social sciences was the statistical tool of analysis. The study used both descriptive and inferential methodologies, and the results were presented using tables. The study findings showed that an increase in cash deposits would result in a 0.612 increase in the market value of commercial banks listed on the NSE. This implied that the study variables were significant. The study concluded that cash deposits have a great effect on the market value of commercial banks listed at the Nairobi securities exchange in Kenya. This is because increase in fee commission leads to more deposits to be made in the commercial bank listed at the Nairobi securities exchange. Additionally, increase agency cash float means that more money is available for lending by the commercial banks. As a result, the study recommends that commercial banks should encourage their clients to make larger deposits into their accounts. This is because huge deposits lead to an increase in the market value of commercial banks listed at the Nairobi securities exchange.