chapter v investment behaviour and...

148

CHAPTER V

INVESTMENT BEHAVIOUR AND SATISFACTION

When the investors are investing in the share market it is said that,

they are emotional rather than rational in most of the occasions. The dynamics

of the investment process, culture, and their relationship with the share broker

can significantly improve the decision-making process, resulting investment

performance and satisfaction. The investment behaviour and satisfaction of

investors were analyzed and the results are discussed in this chapter.

5.1. SOCIO-ECONOMIC CHARACTERISTICS OF INVESTORS

The socio-economic characteristics of the investors such as gender,

educational qualification, occupation, income, nativity of the investors, nature

of their investment, factors for choosing their share broker and average

monthly transactions were analyzed and the results are discussed in the

following sub-headings.

5.1.1. Gender of Investors

Researchers conclude that men were more willing to take

financial risks than women; example Hawley and Fujii (1993-1994), Sung

and Hanna (1996), and Xiao and Noring (1994). The present research also

goes along with the earlier researches, with the evidence that only 22 per cent

of the share market investors are women. The distribution of gender of

investors was analyzed and the results are presented in Table 5.1.1.

149

Table-5.1.1. Distribution of Gender of Investors

Gender Frequency Per Cent Chi-Square

Value

Sig

Men 351 78.000.01

0.02Women 99 22.00Total 450 100.00SD 178.1

Source: Primary and Computed Data

From the above table, it is clear that about 78.00 per cent are men

while the rest of 22.00 per cent are women. The results reveal that more

number of men is investing in the share market. Since the risk taking attitude

is less for women they are mostly away from the stock market. The Chi-

Square value of 0.01 is significant at five per cent level indicating that there is

a significant difference among the gender of investors.

5.1.2. Age of the Investors

The risk tolerance of the investors are very much associated with

their age Morin and Suarez (1983) concluded that an average risk aversion

increased with age measured by the ratio of risky assets to total wealth. It has

been widely assumed and reported that older individuals have less time to

recover financial losses than do younger individuals, which has led to the

assumption that older investors tend to have lower risk tolerances than

younger investors. The distribution of age of investors was analyzed and the

results are presented in Table 5.1.2.

150

Table-5.1.2. Distribution of Age of Investors

Age(Years) Frequency Per Cent Chi-Square

Value

Sig

<30 70 15.56

0.03 0.02

31-40 276 61.3341-50 81 18.00>50 23 5.11

Total 450 100.00

SD 111.865


From the results, it is observed that about 61.33 per cent of

investors belong to the age group of 31-40 years followed by16 percent of the

investors in the age group of 41-50 years. The investors belongs the age group

of less than 30 years is 15.56 per cent and finally the investors belong the age

group of more than 50 years is 5.11 per cent. The research also identified that

most of the investors belong to the age group of 31-40. The research ensures

that there is a close association between age and investing in stock market.

The Chi-Square value of 0.03 is significant at five per cent level indicating

that there is a significant difference among the age group of investors.

5.1.3. Educational Qualification of the Investors

Higher levels of education allow the investors to assess risk and

benefits more carefully than someone with less education. Higher education

has been found to encourage risk taking (MacCrimmon & Wehrung, 1986),

and as such investment managers assume that, the increased levels of

education are associated with increased levels of risk tolerance while

151

investing in stock market. The distribution of educational qualification of the


Table-5.1.3. Distribution of Educational Qualification of Investors

Educational

Qualification

Frequency Per Cent Chi Square

Value

Sig

Secondary 21 4.70

0.04 0.03

Higher Secondary 47 10.40Under Graduation 145 32.20Post Graduation 219 48.70

Doctorate 18 4.00Total 450 100.00

SD 88.685


From the results, it is apparent that majority of investors ie. 48.70

per cent are post graduates followed by under graduation 32.20 per cent,

higher secondary 10.40 per cent; secondary education 4.70 per cent and 4.00

per cent investors are doctorate. The research reveals that most of the stock

market investors are well qualified. The results also indicate that there is a

positive relationship between educational qualification and share market

investment. The Chi-Square value of 0.04 is significant at five per cent level

indicating that there is a significant difference among the educational

qualification of investors.

152

5.1.4. Occupation of the Investors

The occupation of the investors was analyzed and the results are

presented in Table 5.1.4.

Table-5.1.4. Distribution of Occupation of Investors

Occupation Frequency Per Cent Chi-Square

Value

Sig

Accountant 23 5.10

0.11 0.03

Lawyer 19 4.20Auditor 22 4.90Banking 66 14.70Business 56 12.40

Central Government 34 7.60Doctor 14 3.10

Insurance 33 7.30Teaching 46 10.20

Real Estate 33 7.30State Government 57 12.70

Telecom 47 10.40Total 450 100.00

SD 16.774


The results indicate that 14.70 per cent of investors are having their

occupation in banking sector followed by the State Government employees

12.70 per cent, business people 12.40 per cent, telecom employees 10.40 per

cent and respondents in teaching profession 10.20 per cent.

153

The results also show that the occupation of investors is varied

ranging from the Central Government employment 7.60 per cent to doctor

profession 3.10 per cent. The rest of the investors are having the occupation

of insurance and real estate 7.30 per cent, accountant 5.10 per cent, auditor

4.90 per cent and lawyer 4.20 per cent.

The Chi-Square value of 0.11 is significant at five per cent level

indicating that there is a significant difference among the occupation of the

investors. The distribution of occupation of investors is depicted in Figure-

5.1.4.

155

5.1.5. Marital Status of the Investors

The investor’s marital status is an important factor in distinguishing

among levels of investor’s risk tolerance, for two reasons. According to

Roszkowski et al., (1993) the single individuals have less to lose by accepting

greater risk compared to married individuals who often have more

responsibilities for themselves and their dependents. The distribution of the

marital status of the investors was analyzed and the results are presented in

Table 5.1.5.

Table-5.1.5. Distribution of Marital Status of Investors

Marital Status Frequency Per Cent Chi Square

Value

Sig

Married 403 89.600.02 0.03Unmarried 47 10.40

Total 450 100.00


The results show that majority of the investors (89.60 per cent) are

married while the rest of 10.40 per cent of the investors are unmarried. The

research reveals that more number of married investor’s are interested in

investing in the share market, since the Indian share market is well regulated

and safe for them to invest.


indicating that there is a significant difference among the marital status of

investors.

156

5.1.6. Annual Income of Investors

Investment in stock market involves huge risk and hence it is

obvious that not all the income group will take the risk. In 1976, Blume

conducted a thorough examination of risk-taking behavior of stock market

investors, using a combination of data obtained from a large random sample

of investors (N = 1,015) and an exhaustive research review, and concluded

that stockholders with annual gross incomes of $50,000 or more were willing

to take more investment risks than those with lower incomes. The present

research also reveals that about 88 per cent of the investors are in the income

group of 2 to 6 lakhs. The distribution of annual income of investors was

analyzed and the results are presented in Table 5.1.6.

Table-5.1.6. Distribution of Annual Income of Investors

Annual Income

(Rs. in Lakhs)

Frequency Per Cent F-

Value

Sig

< 2.00 17 3.78

11.542 0.03

2.01-4.00 196 43.564.01-6.00 200 44.44

> 6.00 37 8.22Total 450 100.00


From the results, it is apparent that about 44.44 per cent of the

investors belong to the income group of Rs. 4.01-6.00 lakhs followed by

Rs.2.01-4.00 lakhs income group is 43.56 per cent, more than six lakhs 8.22

per cent and less than two lakhs 3.78 per cent. The results shows that most of

the share market investors belong to the income group of 2 to 6 lakhs. It was

157

also found that low income category people are not willing to invest in the

share market.

The F- value of 11.542 is significant at five per cent level

indicating that there is a significant difference among the annual income of

the investors and the graphical representation is depicted in Figure-5.1.6.

Figure-5.1.6. Distribution of Annual Income of Investors

158

5.1.7. Annual Family Income of Investors

The distribution of annual family income of investors was analyzed

and the results are presented in Table 5.1.7.

Table-5.1.7. Distribution of Annual Family Income of Investors

Annual Family Income (Rs in Lakhs)

Frequency Per Cent F- Value Sig.

< 3.00 34 7.56

10.984 0.02

3.01-5.00 200 44.445.01-7.00 192 42.67

> 7.00 24 5.33Total 450 100.00


It is clear that about 44.44 per cent of investors belong to the annual

family income group of Rs. 3.01-5.00 lakhs. This is followed by the investors

belong to the income group of Rs.5.01-7.00 lakhs 42.67 per cent, less than

three lakhs 7.56 per cent and finally the investors belonging to the income

group of more than seven lakhs 5.33 per cent.

The F- value 10.984 is significant at five per cent level indicating

that there is a significant difference among the annual family income of

investors.

159

5.1.8. Family Size of Investors

The family size of investors was analyzed and the results are

presented in Table 5.1.8.

Table-5.1.8. Distribution of Family Size of Investors

Family Size Frequency Per Cent F- Value Sig.

Three 21 4.70

11.986 0.04

Four 128 28.40Five 188 41.80Six 94 20.90

Seven 19 4.20Total 450 100.00


The results show that about 41.80 per cent of the investors have

five members in their families. This is followed by the investors with four

family members 28.40 per cent and then the investors with six members in

their families 20.90 per cent. From the table we can observe that this is

followed by investors with three members in their family 4.70 per cent and

finally investors with seven members in their families 4.20 per cent. The

research reveals that most of the investors are having 4 to 6 family members.

The F-value of 11.986 is significant at five per cent level indicating

that there is a significant difference among the family size of investors.

160

5.1.9. Native Area of Investors

The distribution of native area of investors was analyzed and the


Table-5.1.9. Distribution of Native Area of Investors

Native Area Frequency Per Cent Chi Square

Value

Sig.

Rural 213 47.30

0.02 0.03Urban 237 52.70

Total 450 100.00


The results show that the majority of the investors (52.70 per cent)

belong to urban area while the rest 47.30 per cent of the investors belong to

rural area. The various advancements in Information Technology have

favored everyone to invest in the share market irrespective of the place where

they are. The internet based trading system has paved a path to a large number

of rural population to participate in the stock market.

The Chi-Square value 0.02 is significant at five per cent level

indicating that there is a significant difference among the native area of

investors.

5.1.10. Investors Experience

In recent years, the stock market has seen substantial increase in

retail investor’s participation. Experiences of the investors in share market

help them to take quick and accurate decision, which is very much needed for

the stock market investment.

161

Financial products investors often purchase investment products by

drawing on experience or through the investment appraisal process (Harrison,

2003). Therefore, past investment experience and expertise of the investors

provide them risk awareness and investment avenues. The success or failure

of the past investment experience influences the investors towards risk and

risk perception, and further affects the decision-making behavior (Kathleen

Byrne (2005).

Table-5.1.10. Distribution of Experience in Share Market of the Investors

Year Experience in Share

Market

Investment Experience

Frequency Per Cent Frequency Per Cent

Up to 1 year 22 4.90 37 8.221 to 3 years 154 34.22 186 41.333 to 5 years 245 54.44 191 42.45

Above 5 years 29 6.44 36 8.00Total 450 100.00 450 100.00

SD 107.146 87.782


The results indicate that about 54.44 per cent of investors have the

experience of 3 to 5 years in the share market followed by the investors with 1

to 3 years experience 34.22 per cent, above 5 years of experience 6.44 per

cent and finally 4.90 per cent investors are having 1 year experience in share

market investment. The results indicate that more numbers of investors are

well experienced.

162

The results show that about 42.45 per cent of the investors have the

investment experience of 3 to 5 years. This is followed by the investment

experience of 1 to 3 years 41.33 per cent, up to 1 year 8.22 per cent and above

5 years 8.00 per cent. The research reveals that most of the investors are well

experienced. The above analysis also reveals that the experienced investors

are more confident while investing in share market than the inexperienced.

5.1.11. Nature of Investors and Investment

The investors may be of two type one is investors in primary

market the other is investors in secondary market. Primary market is the

market where shares are offered to investors by the issuer company to raise

their capital. Many people enter the share market as an investor. They buy and

hold securities, hoping that they will appreciate in value. In other words, they

are always looking for the market to go up. The typical investor aims to buy

low and sell high to make a profit.

Secondary market is the market where stocks are traded after they

are initially offered to the investor in primary market (IPO's etc.) and get

listed to stock exchange. Secondary market comprises of equity markets and

the debt markets. Secondary market is a platform to trade listed equities,

while Primary market is the way for companies to enter in to secondary

market.

The share brokers normally deal with two types of customers one is

traders they may be fulltime or part time traders and the other is investors.

Stock traders usually try to profit from short-term price volatility. Traders are

market participants who purchase shares in a company with a focus on the

market itself rather than the company's fundamentals. They try to make profit

as early as possible.

163

Market participants include individual retail investors, institutional

investors such as mutual funds, banks, insurance companies and other

financial institutions. A retail investor may be a regular trader, regular

investor, occasional trader, and occasional investor, investor in primary

market only, investor in secondary market only and investor in both primary

and secondary market. The distribution of nature investment of investors was


Table-5.1.11. Distribution of Nature Investment of Investors

Nature of Investment Frequency Per Cent Chi-Square

Value

Sig

Regular Trader 256 56.90

0.06 0.03

Regular Investor 51 11.30Occasional Trader 34 7.60Occasional Investor 25 5.60Investor in Primary Market Only 24 5.30

Investor in Secondary Market Only 3 0.70

Investor in both Primary and Secondary Market 57 12.70

Total 450 100.00

SD 86.432


The results indicate that 56.90 per cent of investors are regular

traders followed by investors in both primary and secondary market 12.70 per

cent, regular investors 11.30 per cent, occasional trader7.60 per cent,

occasional investors 5.60 per cent, investors in primary market only 5.30 per

164

centand investors in secondary market 0.70 per cent. The Chi-Square value

0.06 is significant at five per cent level indicating that there is a significant

difference among the nature of the investment of the investors

5.1.12. Association with Present Share Broker

The distribution of association with the present share broker by


Table-5.1.12. Distribution of Association with Present Share Broker by

Investors

Association with

Present Share Broker

Frequency Per Cent Chi-Square

Value

Sig.

Up to 1 year 63 14.00

0.03 0.03

1 to 3 year 194 43.103 to 5 year 163 36.20

Above 5 year 30 6.70Total 450 100.00

SD 78.420


From the results, it is clear that about 43.10 per cent of investors

have an association of 1 to 3 years with the present share broker followed by

investors with 3 to 5 years association 36.20 per cent, up to 1 year 14.00 per

cent and above 5 years 6.70 per cent. Most of the investors are having long

term association with the present share brokers.


indicating that there is a significant difference among the association with the

present share broker by investors.

165

5.1.13. Transactions with other Share Brokers

The share brokers need to posses high skill and strategic thinking in

order to satisfy the investors. The research reveals that many share broker’s

lake in some of the important skills which are essential for them to be

successful. Following are the general skills and personality traits required for

the stock brokers, capacity for independent work, excellent communication,

mathematical and analytical skills, working capacity in a hectic pressured and

constantly changing environment, aptitude for research and financial writing,

basic computer skills, making important decisions quickly, extensive

knowledge of the finance industry, maturity and confidence when dealing

with people, networking in order to recruit clients, willingness to be

transferred to other branches, keeping abreast of understanding economic

conditions and trends.

The distribution of transactions with the other share brokers by the


Table-5.1.13. Distribution of Transactions with other Share

brokers by Investors

Transactions with

Other Share Brokers


Value

Sig

Yes 430 95.600.01 0.02No 20 4.40

Total 450 100.00


The results indicate that majority of the investors 95.60 per cent

have transactions with the other share brokers while the rest of 4.40 per cent

166

of investors have not transactions with other share brokers. It was found that

the investors are not happy with one share brokers and that is why they are

having account with more than one share brokers. It is also found that the

investors are service specialization specific they are looking for different

share brokers for different service requirement.


indicating that there is a significant difference among the transactions with

other share brokers by investors.

5.1.14. Choosing the Broker by the Investors

A stock broker is a person who takes care of the investments and

act as a mediator by selling and buying the shares/stocks. The investors give

more importance for the brokers who give close attention to their portfolio.

The investors mostly refer their friends or relatives while choosing share

brokers. The investors believe that, this will create a bond of trust and

security. The investors consider the sales people also to some extent while

choosing the share brokers. The distribution of choosing the broker by


The table shows that about 38.00 per cent of investors choose the

broker through friends followed by sales people 32.40 per cent, relatives

20.00 per cent, e-mail 7.80 per cent and through advertisement 1.80 per cent.

It is found that the investors are not giving importance for advertisement and

e-mail while choosing share brokers. The investor’s friends and the

institutional (share brokers) sales representatives are the most influential

persons while choosing share brokers.

167

Table-5.1.14. Distribution of Choosing the Broker by Investors

Choosing the Broker Frequency Per Cent Chi Square

Value

Sig

Friends 171 38.00

0.04 0.03

Relatives 90 20.00Sales People 146 32.40

Advertisement 8 1.80E-mail 35 7.80Total 450 100.00



indicating that there is a significant difference in choosing the share broker by

investors and the same is graphically shown in Figure-5.1.14.

169

5.1.15. Factors for Choosing Share Broker

The influencing factors for choosing a share broker by investors

was analyzed and the results are presented in Table 5.1.15.

The results indicate that about 64.00 per cent of investors choose

share brokers based on profitability followed by transaction 23.56 per cent,

years of experience 7.33 per cent, facilities 3.12 per cent, popularity 1.33 per

cent, network 0.44 per cent and range of service offered 0.22 per cent. It is

found that profitability is the most important factor for the investors while

choosing the share brokers. Profitability is the most important factor for the

investors for choosing a particular share brokers. The Chi-Square value of

0.06 is significant at five per cent level indicating that there is a significant

difference in factors for choosing share broker by investors. The graphical

representation is depicted in Figure-5.1.15.

Table-5.1.15. Distribution of Factors for Choosing Share Broker

by Investors

Factors for Choosing

Share Broker


Value

Sig

Profitability 288 64.00

0.06 0.04

Transaction 106 23.56Years of Experience 33 7.33

Facilities 14 3.12Popularity 6 1.33Network 2 0.44

Range of Service Offered 1 0.22Total 450 100.00


171

5.1.16. Profit Booking by the Investors

Profit booking is selling of shares at a higher price than the

purchase price. Profit booking at the right time is most important as otherwise

it leads to loss to the investors. It is found that most of the investors are

booking profit on their own decision which shows their confidence about the

share market. The distribution of profit booking by investors was analyzed

and the results are presented in Table 5.1.16.

From the results, it is observed that about 56.90 per cent of

investor’s book profit based on their own decision followed by21.10 per cent

of investors based on the advice of the broker, friends 14.40 per cent, market

trends 5.80 per cent, target reached 1.60 per cent and money needed 0.20 per

cent. It is found most of the investor’s book profit on their own decision.

Advices of the share broker and friends also have some impact on profit

booking.

Table-5.1.16. Distribution of Profit Booking by Investors

Profit Booking Frequency Per Cent Chi Square

Value

Sig

Advice of the Broker 95 21.10

0.05 0.03

Own Decision 256 56.90Friends 65 14.40Market Trends 26 5.80Target Reached 7 1.60Money Needed 1 0.20Total 450 100.00


172


indicating that there is a significant difference in profit booking by investors

and the same is graphically shown in Figure-5.1.16.

Figure-5.1.16. Distribution of Profit Booking by Investors

173

5.2. INVESTORS’ PERCEPTION ON SERVICE QUALITIES OF

SHARE BROKERS

In order to understand the investors’ perception on service qualities

of share brokers, the principal component analysis of exploratory factor

analysis with varimax rotation was performed on the original 37 service

quality dimension and the results are presented in Table 5.2.1.

The factor analysis of 37 service quality dimensions revealed an

eighteen factor structure that explained 66.13 per cent of total variance.

Factor-I CUSTOMER CARE: It is composed of six service quality

dimensions of location of the share broker, accuracy of transaction

reports, timeliness of service, induction of new investors, technology

used and features of service offered. These dimensions accounted for

5.08 per cent of variation, making it the dominant factor.

Factor-II STANDARIZATION: This factor is formed with transaction

statements, trading software and integrated service facilities.

Factor-III INFORMATION: The service quality dimensions of

information network, innovative investment products and service

standards and procedures form the factor-III.

Factor-IV RELATIONSHIP: The service quality dimensions of

corporate image and relationship with the share broker are grouped in

this factor.

Factor-V DEPENDENCY: This factor is formed with safety and

security, reliability of the service providers and interaction with the

investors.

174

Factor-VI ORIENTATION: This factor comprises customer care,

investors meeting, and trainings to investors to adapt new service

technology.

Factor-VII CONVENIENCE: It consists of working hours and

service charges.

Factor-VIII ATTENTIVE: This factor is formed with broker’s

involvement, instructions and guidance and communication system

during trading hours.

Factor-IX ACTIVE: The service quality dimension of responsiveness

of brokers and implementation of investors’ feedback from the factor-

IX.

Factor-X ENVIRONMENT: The service quality dimensions of

facilities for the investors and the service conditions are grouped in this

factor.

Factor-XI SAFETY: This factor is formed with process speed, over

trading instructions and warnings and promotional incentives.

Factor-XII PROMPT: This factor comprises promptness and

complaints redresses.

Factor-XIII MANAGEMENT: This factor is formed with response

towards queries and investors relationship management system.

Factor-XIV AMBIENCE: The service quality dimension of service

office’s ambience forms the factor-XIV.

175

Factor-I

Factor-II

Factor-III

Factor-IV

Factor-V

Factor-VI

Factor-VII

Factor-VIII

Factor-IX

Factor-X

Factor-XI

Factor-XII

Factor-XIII

Factor-XIV

176

Factor-I

Factor-II

Factor-III

Factor-IV

Factor-V

Factor-VI

Factor-VII

Factor-VIII

Factor-IX

Factor-X

Factor-XI

Factor-XII

Factor-XIII

Factor-XIV

177

Factor-I

Factor-II

Factor-III

Factor-IV

Factor-V

Factor-VI

Factor-VII

Factor-VIII

Factor-IX

Factor-X

Factor-XI

Factor-XII

Factor-XIII

Factor-XIV

178

Factor-I

Factor-II

Factor-III

Factor-IV

Factor-V

Factor-VI

Factor-VII

Factor-VIII

Factor-IX

Factor-X

Factor-XI

Factor-XII

Factor-XIII

Factor-XIV

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1.76

1.68

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179

5.2.2. Reliability

The service quality dimensions of the investors’ perception on

the service qualities of the share brokers were measured using a seven point

scale and the reliability coefficient is presented in Table 5.2.2.

Table- 5.2.2 Cronbach’s Alpha Reliability Coefficient

Variables No. of Items Cronbach

Alpha

Tangible 7 0.83

Reliability 5 0.74

Responsiveness 6 0.76

Assurance 5 0.73

Empathy 7 0.84

Competence 7 0.76

Overall Service Quality Dimensions 37 0.86

The Cronbach’s Alpha Reliability Coefficient indicates the internal

consistency of the above said variables. The overall Cronbach’s Alpha of the

scale was 0.86 indicating that each measure demonstrated acceptable internal

consistency. The Cronbach’s Alpha is varying from 0.84 for empathy to 0.73

for assurance. It is found that the variable Tangible ( =0.83) which indicate

the internal consistency among the variable is good, Reliability ( =0.74)

reveals that the internal consistency is acceptable, Responsiveness ( =0.76)

is also acceptable, the variable Assurance ( =0.73) indicate the internal

consistency is acceptable, Empathy ( =0.84) good and Competence

= 0.76) which is acceptable internal consistency.

180

5.3. INVESTORS’ SATISFACTION ABOUT SERVICE PROVIDED BY

SHARE BROKERS

In order to measure the investors’ satisfaction about service

provided by the share brokers, the Factor Analysis (principal component

analysis) was carried out on 30 variables with Eigen Value greater than one

and the results are presented in Table 5.3.1. There were eleven independent

groups of dimensions which were extracted accounting for a total of 66.24 per

cent of variations on 30 satisfaction dimensions. Each of the eleven factors

contributed to 10.59 per cent, 8.15 per cent, 7.32 per cent, 6.77 per cent, 6.22

per cent, 4.81 per cent, 4.67 per cent, 4.58 per cent, 4.48 per cent, 4.41 per

cent and 4.24 per cent respectively.

181

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Factor IV

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183

Factor-I: From the table, it is inferred that out of 30

satisfactionvariables, six variables have their high, relatively tightly grouped

factor loadings on factor-I.

This factor consists of:

Security News (0.68)

Intraday Call (0.64)

Weekly Technical Report (0.63)

Company Report (0.59)

Commodity Trading (0.55)

Investment Advisory Services (0.57)

Hence, this factor is named as “ INFORMATIVE”.

Factor-II: is formed with:

Daily Technical View (0.78)

Sectorial Report (0.65)

Forex Trading (0.54)

These variables are named as “TRADING”.

Factor-III: This factor includes:

Portfolio Advice (0.58)

IPO Information (0.65)

Market Exposure (0.55)

184

These three variables are named as “EXPOSURE”.

Factor-IV: This factor is formed with:

Derivative Report (-0.65)

Technical Report (0.57)

International Market Report(0.60)

Trinity Account(-0.62)

This factor is named as “REPORTING”.

Factor-V: This factor includes:

Research Report (0.65)

SMS Alerts (0.56)

Investors Meet(0.66)

The factor is named as “INTERACTION”.

Factor-VI: This factor is formed with:

Call and Trade (0.69)

Trading Software (-0.66)

This factor is named as “TECHNOLOGY”.

Factor-VII: This factor includes:

Morning Corporate News (0.63)

Company Chart (-0.63)

185

The factor is named as “STATUS”.

Factor-VIII: This factor is formed with:

M-trade (-0.73)

This factor is named as “M-TRADE”.

Factor-IX: This factor is formed with:

After Market Orders (0.67)

Daily Trading(-0.60)

This factor is named as “ORDERS”.

Factor-X: This factor includes:

Commodity Report (-0.61)

Stock Ideas(0.61)

The factor is named as “IDEAS”.

Factor-XI: This factor is formed with:

Mutual Fund Service (-0.68)

Insurance Service (0.73)

This factor is named as “SERVICE”.

186

5.3.2. Reliability

The investors’ satisfaction about the service provided by the

share brokers were measured using a five point scale and the reliability

coefficient is presented in Table 5.3.2.

Table-5.3.2. Cronbach’s Alpha Reliability Coefficient

Variables No. of Items Cronbach

Alpha

Investors’ Satisfaction 30 0.89


The Cronbach’s alpha of the scale was 0.89 indicating that each

measure demonstrated acceptable internal consistency.

5.4. SERVICE RATING OF THE SHARE BROKERS

The overall rating of service received by the investors from share

brokers was analyzed and the results are presented in Table 5.4.1.

Table-5.4.1. Overall Rating of Service Received by Investors from

Share Brokers

Rating of Service Frequency Per Cent Chi Square

Value

Sig.

Average 131 29.10 0.02 0.03 Good 168 37.30

Very Good 151 33.60Total 450 100.00


187

From the results, it is clear that about 37.30 per cent of investors

rate the service provided by the share brokers as good followed by very good

33.60 per cent and average 29.10 per cent.


indicating that there is a significant difference in overall rating of service

received by investors from share brokers.

5.5. RECOMMENDATION OF SHARE BROKERS

The recommendation of present share brokers to others by the


188

Table-5.5.1.Recommendation of the Share Brokers to others by

the Investors

Recommendation Frequency Per Cent Chi Square

Value

Sig

Somewhat unwilling to

recommend 7 1.55

0.03 0.04

Neither willing nor

unwilling to recommend 136 30.22

Willing to recommend 165 36.67Very much willing to

recommend 142 31.56

Total 450 100.00


From the table, it is observed that about 36.67 per cent of the

investors are willing to recommend the present share brokers to others

followed very willing 31.56 per cent. Next comes neither willing nor

unwilling 30.22 per cent and then comes somewhat unwilling 1.55 per cent.


indicating that there is a significant difference in the recommendation of the

present share brokers to others by the investors.

189

5.6. DIFFERENCE BETWEEN SERVICE RATING AND

RECOMMENDATION

The difference between service rating and recommendation by

investors was analyzed by employing t-test and the results are presented in

Table 5.6.1.

Table-5.6.1. Difference between Service Rating and Recommendation

t-Value df Sig

Service Rating-

Recommendation

11.248** 898 0.01

Note: ** indicates significant at one per cent level. Source: Primary and Computed Data

The results show that the t-value for service rating-recommendation

is 11.248 significant at one per cent level of significance. Hence, there is a

significant difference existing between the service rating and the

recommendation of present share brokers by the investors.

5.7. INVESTMENT BEHAVIOUR

The investors by and large behave much more humane than

analytical they are emotional than rational. In most of the occasions investors

choose investment alternatives that provide them with a psychological

satisfaction rather than those that maximize their economic benefits. Their

investment expertise and experience permit them to be caution rather than

venture. Their risk level is a very important factor to decide the individual

investment behaviour. Researchers in the field of behavioral finance have

found that people have an innate tendency to be risk-averse. Research has

shown that people tend to give more weight to the prospect of losing than

190

winning. This is because people feel the pain of defeat much stronger than the

pleasure of victory.

The research done by Love Inness (2003) has identified and

characterized segments of individual investors based on their shared investing

attitudes and behavior. A behavioral finance literature review reveals five

main constructs that drive investor behavior: investment horizon, confidence,

control, risk attitude, and personalization of loss.

Nagy and Obenberger (1994) examined factors influencing investor

behaviour. They developed a questionnaire that included 34 factors such as

expected corporate earnings, diversification needs, feelings for firm’s

products and services, past performance of stocks, past performance of their

own portfolio, stock broker recommendations to name a few.

Individual behavior can lead them act in a totally unexpected way

and subsequently they end up seeing their investment performing very poorly

in usual case. Kim and Nofsinger (2003) studied individual investors in the

Japanese markets and examine their behaviour and performance.

The study conducted by Brown and Cliff (2004) extends much

scope for the present study conducted in the Indian context. In their study,

Brown and Cliff investigated investor sentiment and its relation to near-term

stock market returns.

191

5.7.1. Investment Behaviour and Demographic Characteristics of the

Investors

The research reveals the relationships regarding demographic

characteristics of the investors and their share market investment behaviour

the same is summarized and presented in the Figure No. 5.7.1

Characteristic Stock Market Investment behaviour

Low Involvement High involvement

Gender Women Men

Age Old investors Young investors

Educational

Qualification

Higher Secondary and

below

Graduation and more

Occupation Accountant , Auditors

Doctors, Layers

Business, Banking

Marital Status Unmarried Married

Annual Income Less than 2.00 lakhs More than 2 lakhs

Native Area Others Urban , Rural

Experience Less than 1 year More than one year

Source: Primary Data

Figure - 5.7.1. Investment Behaviour and Investors Demographic

Characteristics

The research found that men are showing more involvement than

women while investing in the stock market, older individuals are less

involved than younger people, single individual’s participation is less than

married , occupations like business and banking are associated with increased

192

and occupations like accountant, auditors, doctors and lawyers are associated

with decreased levels of involvement, individuals with greater income have

greater involvement than lower income earners, Rural and urban investors are

showing greater involvement than others, and greater educational attainment

is associated with increased involvement.

5.7.2. Relationship between Investment Behaviours

The relationship between locus of control, investor expertise and

experience, risk propensity, confidence, satisfaction and behavioural

intentions was analyzed by computing the Correlation Coefficients and the


Table -5.7.2. Relationship between Investment BehavioursLocus of C

ontrol

Investor Expertise

and Experience

Risk Propensity

Confidence

Satisfaction

Behavioural

Intention

Locus of Control 1.00

Investor Expertise

and Experience 0.51** 1.00

Risk Propensity 0.55** 0.74** 1.00

Confidence 0.55** 0.73** 0.76** 1.00

Satisfaction 0.44** 0.62** 0.64** 0.63** 1.00

Behavioural

Intention 0.56** 0.64** 0.66** 0.63** 0.56** 1.00

Note: ** indicates significant at one per cent level Source: Primary and Computed Data

193

The results show that the locus of control, investor expertise and

experience, risk propensity, confidence, satisfaction and behavioral intention

are positively, significantly correlated with each other at one per cent level of

significance. The Correlation Co-Efficient is varying from 0.44 for locus of

control and satisfaction to 0.76 for risk propensity and confidence.

5.7.3. Profit booking Behaviour of Men and Women Investors

The relationship between the men and women investors profit booking

behavior was analyzed and the results are presented in Table 5.7.3.

Table- 5.7.3. Profit booking Behaviour of Men and Women Investors

Profit Booking Men Women Total t-statistics

Advice of the Broker 71 47 95

1.15

Own Decision 19 7 26

Friends 47 18 65

Market Trends 208 48 256

Target Reached 5 2 7

Money Needed 1 0 1

Total 351 99 450

Mean 58.5 20.3

SD 77.933 21.951


From the analysis results, it is observed that there is a positive

correlation among the men and women investors while booking profit

(r=0.98). The study further reveals that there is no significant difference

among men and women investors while booking profit.

194

5.7.4. Profit booking of Rural and Urban Investors

The relationship between the rural and urban investors profit

booking behavior was analyzed and the results are presented in Table 5.7.4.

Table - 5.7.4. Profit Booking of Rural and Urban Investors

Profit Booking Rural Per

cent

Urban Per

cent

Total ‘t’

Statistics

Advice of the

Broker 83 38.97 12 5.06 95

0.0914Own Decision 5 2.35 21 8.86 26

Friends 37 17.37 28 11.81 65

Market Trends 82 38.50 174 73.42 256

Target Reached 6 2.82 1 0.42 7

Money Needed - 0.00 1 0.42 1

Total 213 100 237 100 450

Mean 35 39

SD 38.682 66.762


The research reveals that there is a positive correlation among

the rural and urban investors while booking profit (r=0.574). It is found that

the rural investors are very much depends on the advice of the investors while

booking profit. It is found that most of the urban investors are booking profit

based on the market trend not by the advice of the share broker. The t value is

0.0914 reveals that, it is not significant at five per cent level of significant,

indicating that there is no significant difference in profit booking of rural and

urban investors

195

5.7.5. Experience with the Broker in Profit Booking

Investors of share market are eager to understand how and when to

book profits. The share brokers should periodically advise them to sell what

they have bought to earn a good return. There is two important motivation

behind Profit booking the first one is to liquidate in order to meet a specific

requirement.

The second is view-based selling, where investors like to keep the

money invested, but may want to move it from one investment to another.

Such selling can take place in three different situations. First, investors may

rebalance their portfolios to achieve what they are comfortable with. Second,

they may want to tactically modify the composition of their investment.

Third, they may alter the choice of investment, selling something that is not

working for them. The skills required for each of these view-based decisions

is progressively higher and share brokers involvement is very much needed.

The distribution of experience with the broker in profit booking by investors

was analyzed and the results are presented in Table 5.7.5.

Table-5.7.5. Distribution of Experience with the Broker in Profit Booking

by Investors

Experience in Profit

Booking


Value

Sig

Satisfied 433 96.200.01 0.02Dissatisfied 17 3.80

Total 450 100.00


196

From the results, it is clear that majority of the investors 96.20 per

cent are satisfied while only 3.80 per cent of investors are dissatisfied with the

broker in profit booking.


indicating that there is a significant difference in experience with the broker in

profit booking by investors.

5.7.6. Factors for Choosing Share Broker

A stock broker is a stock market expert who helps the investors in

buying and selling the shares of the listed companies. In order to invest in the

share market the share brokers association is essential for the investors.

Finding the best stock broker is one of the most important processes for

investment objectives. The share brokers offer different services to the

investors. The investor’s choice should be based upon how much help that

they needed for their investment planning. Apart from the various specific

services offered by the share brokers, the research has identified seven

important factors that induce the investors to choose a particular share

brokers. In order to analysis the various factors, principal factor analysis has

been applied and the results are presented.

197

Table-5.7.6.1. Correlation Matrix (Pearson)

Variables

Profitability

Transaction

Years of

Experience

Facilities

Popularity

Netw

ork

Range of

Services Offered

Profitability 1

Transaction 0.129 1

Years of Experience -0.340 0.684 1

Facilities -0.640 0.323 0.664 1

Popularity -0.813 -0.412 -0.143 0.148 1

Network -0.656 -0.569 -0.350 -0.029 0.964 1

Range of Services Offered -0.637 -0.646 -0.127 0.297 0.493 0.437 1

The above analysis revels that the network and popularity are very

closely associated. The correlation matrices reveals that the factors like

profitability and Transaction, years of experience and transaction, Facilities

and year of experience and transaction, Network and popularity ,range of

services and popularity and facility and network are positively correlated.

The factor analysis of 7 factors dimensions revealed a three factor

structure that explained 84.019 per cent of total variance. The analysis reveals

the engine value of 3.224, 2.167 and 0.490 respectively.

198

Table-5.7.6.2. Eigenvectors

Factors F1 F2 F3

Profitability -0.470 -0.395 -0.021

Transaction -0.333 0.401 -0.474

Years of Experience -0.123 0.617 -0.050

Facilities 0.110 0.535 0.304

Popularity 0.508 0.031 -0.419

Network 0.495 -0.120 -0.419

Range of Services Offered 0.370 0.021 0.573

Eigen value 3.224 2.167 0.490

Variability (%) 46.059 30.961 7.000

Cumulative % 46.059 77.020 84.019

Table -5.7.6.3. Factor Pattern

Factor -1 Factor -2 Initial

communality

Final

communality

Specific

variance

Profitability -0.824 -0.567 0.991 1.000 0.000

Transaction -0.599 0.590 0.992 0.707 0.293

Years of

Experience -0.220 0.909 0.871 0.874 0.126

Facilities 0.198 0.788 0.837 0.660 0.340

Popularity 0.912 0.046 0.999 0.834 0.166

Network 0.889 -0.176 0.999 0.822 0.178

Range of

Services

Offered 0.665 0.031 0.987 0.444 0.556

Values in bold correspond for each variable to the factor for which the squared cosine is the largest

199

Factor-I It is composed of five components like Profitability, Transaction,

Popularity, Network and Range of Service Offered.

Factor-II It is composed of two components like Years of Experience and

Facilities.

Table-5.7.6.4. Correlations between Variables and Factors, Factor

Pattern Coefficients and Factor Scores

Factors

Correlations

between variables

and factors

Factor pattern

coefficients

Factor scores

F1 F2 F1 F2 F1 F2

Profitability -0.811 -0.557 0.728 -1.110 -1.569 -1.507

Transaction -0.604 0.618 -1.313 1.214 -0.716 0.031

Years of Experience -0.218 0.945 -0.105 0.624 -0.653 1.526

Facilities 0.210 0.819 0.541 -0.223 0.127 0.994

Popularity 0.944 0.056 4.679 -4.027 0.532 0.090

Network 0.925 -0.170 -3.639 3.596 1.569 -0.972

Range of Service

Offered 0.697 0.046 -0.594 0.681 0.710 -0.161

Values in bold correspond for each observation to the factor for which the

squared cosine is the largest

202

5.8. INFLUENCE OF INVESTMENT BEHAVIOURS ON MONTHLY

TRANSACTION

5.8.1. Average Monthly Transaction

The distribution of average monthly transaction of investors was


Table-5.8.1. Distribution of Average Monthly Transaction of Investors

Average Monthly

Transaction(Rs)


Value

Sig.

< 50000 18 4.00

0.04 0.03

50001-100000 85 18.90 100001-300000 229 50.90 300001-500000 100 22.20

> 500000 18 4.00 Total 450 100.00


From the table, it is apparent that about half of the investors (50.90 per

cent) have the average monthly transaction of Rs.100001-300000 followed by

Rs.300001-500000(22.20 per cent), Rs. 50001-100000(18.90 per cent) and less

than Rs. 50000 and more than Rs. 500000(4.00 per cent).


indicating that there is a significant difference in average monthly transaction of

investors.

203

5.8.2. Influence of Investment Behaviours on Average Monthly Transaction

In order to assess the influence of the investment behaviours on

average monthly transaction of investors, the multiple linear regressions by

Ordinary Least Square (OLS) estimation and the results are presented in Table

5.8.1.

Table- 5.8.2. Influence of Investment Behaviours on Average Monthly

Transaction of Investors-Multiple Regression

Investment

Behaviours

Regression

Coefficients

t-value Sig

Intercept 5.478** 14.986 .001

Locus of Control(X1) -.032** 4.148 .011

Investor Expertise and

Experience(X2).055** 4.206 .001

Risk Propensity(X3) .023 1.503 .132

Confidence(X4) .090** 4.207 .012

Satisfaction(X5) .057* 2.279 .032

Behavioural

Intention(X6).001 .481 .631

R2 0.73

Adjusted R2 0.68

F 11.956 0.01

N 450

Note: ** Significance at one per cent level * Significance at five per cent level


204

The results indicate that the coefficient of multiple determination (R2 )

is 0.73 indicating the regression model fit is good.

The results show that satisfaction is positively influencing the

average monthly transaction of the investors at five per cent level of significance

while investor’s expertise and experience and confidence positively influence the

average monthly transactions of investors at one per cent level of significance.

The locus of control negatively influences the average monthly transaction of

investors at one per cent level of significance.

5.9. DISCRIMINANT ANALYSIS FOR CUSTOMER RELATIONSHIP

BASED ON ASSOCIATION WITH SHARE BROKER

In order to discriminate the customer relationship based on association

with present share broker, the discriminant analysis has been applied and the

results are here under discussed.

5.9.1. Selection of Discriminating Variables

In order to determine the consumer relationship which significantly

contribute to the differentiation of associated groups, F test is used for Wilks’

Lambda. The ANOVA results are presented in Table 5.9.1. The F test is

significant for eight variables of frankness, care, disclosure, trust, commitment,

friendship, attitude and safe and security.

205

Table- 5.9.1. Tests of Equality of Group Means

Customer

Relationship

Wilks'

Lambda F df1 df2 Sig.

Frankness .911 14.514 3 445 .001

Care .976 3.645 3 445 .013

Disclosure .982 2.651 3 445 .028

Trust .957 6.650 3 445 .001

Commitment .968 4.863 3 445 .002

Retention .981 2.914 3 445 .084

Relationship .996 .628 3 445 .597

Needs .984 2.342 3 445 .073

Friendship .935 10.347 3 445 .001

Rules .922 12.588 3 445 .081

Responsibility .981 2.902 3 445 .035

Attitude .812 34.452 3 445 .001

Complaints .963 5.761 3 445 .601

Opportunities .989 1.693 3 445 .168

Feedback .984 2.471 3 445 .061

Facilities .990 1.472 3 445 .221

Safe and security .972 4.285 3 445 .005

Timely

transaction .993 1.004 3 445 .391

Accuracy .991 1.346 3 445 .259

Accessibility .982 2.695 3 445 .246

Courtesy .973 4.189 3 445 .216

206

Table- 5.9.1. (Continued)

Customer Relationship

Wilks' Lambda F df1 df2 Sig.

Tolerance .998 .350 3 445 .789 Importance .996 .623 3 445 .601 Attention .994 .890 3 445 .446 Innovations .978 3.326 3 445 .120Source: Primary and Computed Data

5.9.2. Estimation of Discriminant Function

In this study, the Discriminant Analysis is carried out for four

associated groups and it results in three discriminant functions and consequently

first three eigen values and the results are presented in Table 5.9.2.

Table- 5.9.2. Eigen Values

Function Eigenvalue % of

Variance

Cumulative

%

Canonical

Correlation

1 .448 79.80 79.80 .893 2 .075 13.30 93.10 .264 3 .039 6.90 100.00 .193


The highest value (0.45) corresponds to the first discriminant function,

which shows that it has the strongest power of discrimination of the two

functions. Also, the first function accounts in a ratio of 79.80 per cent for the

207

dispersion of the group means, as compared to the second and third function

which account in a ratio of 13.30 and 6.90 per cent respectively.

The Canonical Correlation Coefficient, measuring the relation between

the discriminant factorial coordinates and the grouping variable show that 79.75

i.e (0.893)2 of the total variance accounts for the differences among the four

associated groups through the first discriminant function.

5.9.3 Standardized Canonical Discriminant Function Coefficients

The standardized coefficients for the discriminant function were

calculated and the results are presented in Table 5.9.3. The discriminant function

coefficients are used for calculating the discriminant score for each case in

particular.

Table -5.9.3. Standardized Canonical Discriminant Function Coefficients

Customer Relationship Function 1 Function 2 Function 3

Frankness -.449 .075 .054

Care -.446 .189 .091

Disclosure -.656 -.111 .302

Trust -.014 .060 .003

Commitment .040 -.205 .750

Retention -.018 .209 .035

Relationship -.075 -.004 .590

Needs .072 .090 .301

Friendship .479 .180 .294

Rules .034 .695 .290

208

Table -5.9.3. ( Continued)

Customer Relationship Function 1 Function 2 Function 3

Responsibility .088 -.066 -.002

Attitude .668 .450 -.191

Complaints .138 -.245 .147

Opportunities .100 -.511 -.146

Feedback .179 -.149 -.269

Facilities .180 -.027 -.359

Safe and security .576 .041 -.065

Timely transaction .143 -.337 -.158

Accuracy .163 -.451 -.171

Accessibility .090 -.179 .067

Courtesy .178 .136 .016

Tolerance -.053 .201 .001

Importance -.022 .104 .112

Attention -.068 .384 .202

Innovations -.152 .292 -.199


Taking into the account that the first function has the highest

discriminating power, the first discriminant function is:

Z = -0.449Z1 - 0.046 Z2 - 0.056 Z3 - 0.014Z4 + 0.040Z5 - 0.018 Z6 - 0.075Z7 +

0.072Z8 + 0.279Z9 + 0.034 Z10 + 0.088Z11 + 0.668Z12 + 0.138 Z13 + 0.100Z14

+0.179Z15 + 0.180Z16 + 0.276 Z17 + 0.143Z18 + 0.163Z19 + 0.090 Z20 + 0.178Z21 -

0.053Z22 - 0.022Z23 - 0.068 Z24 - 0.152 Z25

The Z1 to Z25 are standardized X1 to X25 variables.

209

The size of the coefficients indicates frankness, care, disclosure,

friendship, attitude and safe and security discriminate best among four associated

groups.

5.9.4 Structure Matrix

The structure matrix coefficients are presented in Table 5.9.4. From

the table, the results indicate the correlation between each predictor measures and

the discriminant function.

For the first discriminant function, it can be seen that correlation

coefficients have high values for five measures viz., disclosure, care, frankness,

attitude and safe and security, which means that these measures are strongly

correlated with the first function. These measures would probably characterize

best division of associated groups.

For the second function complaints, responsibility, rules, commitment,

opportunities, tolerance, innovations, facilities, timely transaction and accuracy

are strongly correlated. These measures would also probably characterize best

division of associated groups.

210

Table -5.9.4. Structure Matrix

Consumers’

Expectations

Function

1 2 3

Disclosure .717* .158 -.070

Care -.453* .267 .109

Frankness -.419* .248 .202

Attitude .379* .257 .095

Safe and security .371* .047 -.177

Responsibility .242 .162* .005

Rules .213 .140* -.125

Commitment .205 .093* .056

Opportunities .190 -.049* -.095

Tolerance .115 -.104* -.044

Innovations -.054 -.367* .042

Timely transaction -.199 .271* .188

Accuracy .045 .136* -.039

Trust .197 -.246 .528*

Attention .027 -.031 .315*

Relationship .169 .216 -.292*

Needs .221 .240 .261*

Friendship .188 -.077 .216*

Courtesy .177 -.053 .196*

Retention .081 .155 .180*

Importance .077 -.073 .173*

Feedback .134 .106 -.158*

Note: * indicates largest absolute correlation between measure and discriminant function


211

For the third function, trust, attention, relationship, needs, friendship,

accessibility, courtesy, retention, importance and feedback are strongly

correlated. These measures would also probably characterize best division of

associated groups.

5.9.5. Efficiency of Discriminant Function

The efficiency of discriminate function is presented in Table 5.9.5.

Based on the discriminant function, 82.22 per cent of the measures have been

correctly classified.

Table -5.9.5. Efficiency of Discriminant Function

Associated

Group

Predicted Group Membership

Up to 1

Year

1 to 3

Year

3 to 5

Years

Total

Count

Up to 1 Year 48 6 4 5 63

1 to 3 Year 9 168 11 6 194

3 to 5 Years 11 8 135 9 163

Above 5 Years 2 4 5 19 30

%

Up to 1 Year 76.19 9.52 6.35 7.94 100.00

1 to 3 Year 4.64 86.60 5.67 3.09 100.00

3 to 5 Years 6.75 4.91 82.82 5.52 100.00

Above 5 Years 6.67 13.33 16.67 63.33 100.00

Note: 82.22 % of original grouped cases correctly classified Source: Primary and Computed Data

212

5.10. BENEFITS TO THE INVESTORS THROUGH SHARE

BROKERS

The share brokers are providing investment advice, market-leading

research and comprehensive broking services across a broad range of trading

products. The investors are benefited in different ways:

Limited procedure and formalities

Due recognition and respect

Quick response

Accurate information and advisors

Excellent returns

Excellent research reports recommending weather to buy and avoid

Multiple services offerings

The benefits of the share brokers were analyzed by applying the Garrett’s

ranking technique and the results are presented in Table 5.10.1.

Table - 5.10.1. Benefits of Investors

Benefits Mean Score Rank

Limited procedure and formalities 46.68 VII

Due recognition and respect 72.60 II

Quick response 79.68 I

Accurate information 64.36 III

Excellent returns 55.28 IV

Excellent research reports 48.56 VI

Multiple services offerings 52.84 V


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The results indicate that the first and fore most benefit of share brokers is

quick response followed by due recognition and respect, accurate information

and excellent returns.

The results also show that multiple services offerings, excellent research

reports and limited procedure and formalities are the other benefits of the share

brokers as perceived by the investors.

5.11. PROBLEMS FACED BY INVESTORS THROUGH SHARE BROKERS

The environmental factors like weather, political instability, political

decisions, war, terrorist threats, strikes, economic trends, international trade and

company scandals are the major cause of stock market volatility, and biggest

problem for the investors. Apart from these external issues the investors also

facing internal problems from share brokers such as:

Delayed and Time consuming process

Failure of the software and information system

Poor communication system

Service brokers ignorance

Wrong information and reports

Unethical practices of the share brokers and

Old and outdated technology

The problems faced by the investors while trading through the share

brokers were analyzed by applying the Garrett’s Ranking Technique and the


214

Table- 5.11.1. Problems Faced by Investors through Share Brokers

Problems Mean Score Rank

Time consuming process 68.46 II

Failure of the software 62.28 IV

Poor communication system 74.52 I

Service brokers ignorance 64.74 III

Wrong information and reports 58.26 V

Unethical practices 52.18 VII

Outdated technology 54.84 VI


The results show that the first and fore most problem faced by the

investors while trading through share brokers is poor communication system

followed by time consuming process, service brokers ignorance and failure of the

software. The results also indicate that wrong information and reports, outdated

technology and unethical practices are the other problems as perceived by the

investors.

chapter v investment behaviour and...

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