| Title : | Investors' awareness, perceived risk attitudes, and investors' behavior: a case of Nepalese capital market | | Material Type: | printed text | | Authors: | Pawan Kawan, Author | | Publication Date: | 2014 | | Pagination: | 95p. | | Size: | GRP/Thesis | | Accompanying material: | 4/B | | General note: | Including bibilography | | Languages : | English | | Descriptors: | Banks and banking
Common stock
Stock exchanges
Stocks
| | Keywords: | 'stocks market stock exchanges banks banks and banking return on assests' | | Class number: | 332.632 | | Abstract: | Stock market is considered as one of the best ways to increase funds. The stock market is one of the most important sources for companies to raise money. This allows business to be publicly traded, or raise additional capital for expansion by selling shares of ownership of the company in a public market. Stock market plays a crucial role in the financial system. Investor behavior on the stock market is often seen to be a factor of cognition, emotion and social influences. And the need to incorporate psychology attempts to explain how perception of investors and their reaction to uncertainties affect the investment decision there by influencing price movements. Capital market helps to mobilize the surplus unit to deficit unit for productive investments. As capital market mobilizes the scattered resources and channels them in productive sector, capital market is an effective instrument of expanding productive capacities of the country.
Although there is an abundant academic literature on global stock market, especially in the developed countries, but one finds little literature on the Nepali stock market. The study on investors’ awareness, perceived risk attitudes and investors’ behavior is comparatively less in Nepal as compared to other developed countries. The trading in share market is not just affected by the information but also by other factors such as psychological factors, education and income. It is seen that investors are more reliable and attached with a particular type of investment alternatives. The prominent issues in the stock market might be the fluctuating stock market indices, the capital centric trading system, limited numbers of dominant investors, and their influences in stock market.
The primary sources of data have been used to assess the opinion of respondents with respect to investor awareness, perceived risk attitudes and investor behavior in case of Nepalese capital market. The questionnaire survey has been conducted to record the opinions, perceptions, and characteristics of investors in Nepalese capital market. The stock investors are selected from different brokers’ floors in Kathmandu and personally known investor friends and relatives. The selection of the brokers’ floor is based on the random sampling procedure. The structured questionnaires in English medium with 35 questions were distributed among the investors. The study was conducted in Kathmandu valley by distributing 300 questionnaires through field survey and email survey method. 120 questionnaires were distributed in field survey where 77 responses received. Likewise 180 questionnaires were distributed in email survey where 138 responses received. Thus there are altogether 215 respondents on which the entire study depends. The study classified investors into 3 categories which are small, medium and large investors on the basis of annual investment in shares for the purpose of comparative study and analysis.
The major finding of this study is that male investors are more active in capital market and portion of married investors are large. Capital gain is the major objective of the investors. Likewise as experience of the investors increases the level of investment will also increases. Most of investors have moderate knowledge about capital market and uses fundamental analysis. Similarly investors are aware about mutual fund, CDS, credit rating agency and portfolio management services. Investors perceived that good news have positive effect on stock market, bad news have negative effect and effect of informational news is inconsistent. Investors consider political and economic changes as the major sources of information to analyze the shares while market trend as major factor affecting the investors’ behavior. Majority of investors analyzes risk and return before investment in stock market and they prefer moderate risk – moderate return. The multiple regression analysis with entire explanatory variables in model revealed that investors’ behavior is positively and significantly related with investors’ awareness and perceived risk attitudes. Similarly investors’ behavior is positively and significantly related with social learning, financial awareness, affective and cognitive aspects.
The recommendation put forward by this study is that regulating authorities should encourage female investors to invest in stock market by providing awareness about capital market as male investors dominate the Nepalese stock market. Likewise small investors should encourage transacting in secondary market by providing efficient market information. To increase the investors’ level of knowledge about capital market, regulating authorities must introduce different awareness programs. Similarly concern authorities should create suitable environment to boost confidence of the investors by formulating suitable rules and regulation. Finally, investors are recommended to invest based on market information rather than other individual's decisions. |
Investors' awareness, perceived risk attitudes, and investors' behavior: a case of Nepalese capital market [printed text] / Pawan Kawan, Author . - 2014 . - 95p. ; GRP/Thesis + 4/B. Including bibilography Languages : English | Descriptors: | Banks and banking
Common stock
Stock exchanges
Stocks
| | Keywords: | 'stocks market stock exchanges banks banks and banking return on assests' | | Class number: | 332.632 | | Abstract: | Stock market is considered as one of the best ways to increase funds. The stock market is one of the most important sources for companies to raise money. This allows business to be publicly traded, or raise additional capital for expansion by selling shares of ownership of the company in a public market. Stock market plays a crucial role in the financial system. Investor behavior on the stock market is often seen to be a factor of cognition, emotion and social influences. And the need to incorporate psychology attempts to explain how perception of investors and their reaction to uncertainties affect the investment decision there by influencing price movements. Capital market helps to mobilize the surplus unit to deficit unit for productive investments. As capital market mobilizes the scattered resources and channels them in productive sector, capital market is an effective instrument of expanding productive capacities of the country.
Although there is an abundant academic literature on global stock market, especially in the developed countries, but one finds little literature on the Nepali stock market. The study on investors’ awareness, perceived risk attitudes and investors’ behavior is comparatively less in Nepal as compared to other developed countries. The trading in share market is not just affected by the information but also by other factors such as psychological factors, education and income. It is seen that investors are more reliable and attached with a particular type of investment alternatives. The prominent issues in the stock market might be the fluctuating stock market indices, the capital centric trading system, limited numbers of dominant investors, and their influences in stock market.
The primary sources of data have been used to assess the opinion of respondents with respect to investor awareness, perceived risk attitudes and investor behavior in case of Nepalese capital market. The questionnaire survey has been conducted to record the opinions, perceptions, and characteristics of investors in Nepalese capital market. The stock investors are selected from different brokers’ floors in Kathmandu and personally known investor friends and relatives. The selection of the brokers’ floor is based on the random sampling procedure. The structured questionnaires in English medium with 35 questions were distributed among the investors. The study was conducted in Kathmandu valley by distributing 300 questionnaires through field survey and email survey method. 120 questionnaires were distributed in field survey where 77 responses received. Likewise 180 questionnaires were distributed in email survey where 138 responses received. Thus there are altogether 215 respondents on which the entire study depends. The study classified investors into 3 categories which are small, medium and large investors on the basis of annual investment in shares for the purpose of comparative study and analysis.
The major finding of this study is that male investors are more active in capital market and portion of married investors are large. Capital gain is the major objective of the investors. Likewise as experience of the investors increases the level of investment will also increases. Most of investors have moderate knowledge about capital market and uses fundamental analysis. Similarly investors are aware about mutual fund, CDS, credit rating agency and portfolio management services. Investors perceived that good news have positive effect on stock market, bad news have negative effect and effect of informational news is inconsistent. Investors consider political and economic changes as the major sources of information to analyze the shares while market trend as major factor affecting the investors’ behavior. Majority of investors analyzes risk and return before investment in stock market and they prefer moderate risk – moderate return. The multiple regression analysis with entire explanatory variables in model revealed that investors’ behavior is positively and significantly related with investors’ awareness and perceived risk attitudes. Similarly investors’ behavior is positively and significantly related with social learning, financial awareness, affective and cognitive aspects.
The recommendation put forward by this study is that regulating authorities should encourage female investors to invest in stock market by providing awareness about capital market as male investors dominate the Nepalese stock market. Likewise small investors should encourage transacting in secondary market by providing efficient market information. To increase the investors’ level of knowledge about capital market, regulating authorities must introduce different awareness programs. Similarly concern authorities should create suitable environment to boost confidence of the investors by formulating suitable rules and regulation. Finally, investors are recommended to invest based on market information rather than other individual's decisions. |
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