why investors not investing in the stock market
TRANSCRIPT
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CHAPTER NO. 6 REASEARCH ANALYSIS 6.1 Analysis and Interpretation of Data .. 48
CHAPTER NO. 5 CONCLUSION AND RECOMMENDATIONS.
7.1 Conclusion 657.2 Recommendations ..... 66
BIBLIOGRAPHY.............. 67
ANNEXURE
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ACKNOWLEDGMENT
At the completion of my research project I would like to thank God Almighty for
giving me the power, energy and guidance to do this research study.
I would then like to thank my resource person, Mr. Dr. NOOR MEMONfor giving
me this opportunity to carry out this project. I would like to thank him for all his
help and guidance.
Last but not the least, I would like to thank my family and friends for being there
for me whenever I needed then for bearing with me all the way through.
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INSTITUTE OF BUSINESS AND
TECHNOLOGY
ABSTRACT SUBMITTED BY: Noman Jamil
DISCIPLINE: MBA(Banking & Finance)
TITLE OF PROJECT REPORT: Why investors not Investing in the
Stock Markets
MONTH OF SUBMISSION: November, 2010
NAME OF PROJECT SUPERVISOR: Dr. Noor Ahmed Memon
ABSTRACT
We are led to believe that the best place to invest our money is in the stock
market. Low barriers to entry, low barriers to exist, plenty of information, high
probability of success in the long run and a lot of success stories. We also hear
some of the horror stories of people who day traded tech stocks in the early
2000s, gamblers who lost it all on penny stocks. Most of the people in Pakistan
do not invest in stock markets cause of fear of loss and the economical condition
of country. political uncertainty is another factor which s un negligible. The
thinking involved before making a decision to invest in stocks includes how to
actually do it and in what stocks to invest. First someone has to decide whether
he is willing to take on some risk and place his money on a stock that he hopes
will increase in value. Due diligence by investigation of the company along with a
study of it's history are critical factors. No one should just take a chance and
invest in a company simply because it has been in business a long time. Thought
is also required regarding how much of a role his stock investments will play
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within his entire investment portfolio. Also, if he is a first-time investor, he will
have to register with a brokerage firm before buying stocks or making trades.
Investing in the stock market has one overriding goal: to make money. A typical
reason why people will choose to invest in stocks rather than other avenues can
be because he likes a specific industry or company. . Excitement and thrill are
factors as well, with anticipation of hitting it big by owning a piece of a company
he likes and having the opportunity to flourish with it.
Stocks provide but one avenue of investing. There are corporate and
government bonds available, which are considered less risky than stocks but
typically offer smaller returns, that are commonly found in portfolios. Investing in
commodities such as gold or silver is yet another avenue, as is real estate, while
some choose to invest in themselves through self-employment. Many investors
have a diversified portfolio as a protection, so that if one form of investment takes
a downward turn, there is still opportunity that the other instruments will be doing
well and dampen the loss. Stocks are considered to be one of the most risky
investments but also offer a chance to reap large rewards as the continuation of
this opportunity remains prevalent.
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01. INTRODUCTION
1.1 Introduction:
Stock exchange is of the powerful financial institutes. By 1995, over 60
developing countries had established although these varied considerable in size
in terms of number of companies listed and market capitalization.
Stock market not only helps investors their money but also provides their
significant funds to different companies. Whenever a company needs funds for
investment in its operation/business, it either raises debts/loans or invites
equity/capital from the investors. When funds are raised through equity/capital,
investors in acknowledgement of the portion of their investment are made the
shareholder of the company and issued share certificates as a proof of their
ownership in the company. Stock ownership has provided the greatest
investment opportunity to the largest number of people over time. Now whenever
a certain shareholder of the company wishes to sell all or part of her/his holdings,
he or she can only do so through the stock market. Likewise, anyone willing to
buy the shares of the company can do in the stock market.
Other then stock market there are different financial institute, which provide fundto company like banks or corporate bonds. Similarly, investors are investing in
different financial institute/schemes like bonds, saving certificates, banks.
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1.2 Purpose of Research:
There is a lot of mystery in the minds of people, who are new to working with the
stock market. There is the fear and concern of possibly losing hard earned
money, coupled with the wonder and excitement of building large profits.
Even though, people do invest in different market/schemes. They find the specific
market/scheme according to their needs and put their earned money there. It is
an observation that some of people, who are potential investors or who are
investing in any form, are not trading in stock market. This research is specially
focused on finding factors that are stopping any investor to invest in stock
market.
It is important to know that one can start buying stock with just few rupees a
month. As one start with a small amount, a lot of experience is not required.
Person knowledge and experience will increase as the amount of money you
invest grows. Above all stock provide highest return on investment with greater
risk.
Frequent substantial political, economical and social changes make of an
adventurous nature. Due to the adventurous nature of these securities, returns
can sometimes be handsome, making them attractive to investors willing to
tolerate risk. However, the downside danger can be substantial.
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1.3 Researched Objectives:
Following are the objectives of this research project.
1. To find out the awareness of stock market among the people.
2. To identify why any investor does not invest in stock market.
3. The factor which are affecting investors decision.
4. To determine what investors want out of his money that he/she invested.
1.4 Research Methodology:
In any survey, the methodology employed is crucially important, as the local
people are reluctant to reveal any pertinent information to the surveyor. To
overcome this problem a unique method of investigation was required. The
required information had to be gathered in a way, which meets all the objective
requirements with a high degree of accuracy.
Measurement instrument that is used in research is questionnaire. A
questionnaire is a list of planned, written question related to a particular topic,
with space provided for indicating the response to each question, intended for
submission to a person for reply. Questionnaire contains 24 relevant questions.
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02. LITERATURE REVIEW
Local Literature:
2.1 Pakistan and Gulf Economist:
Equities offer an incredibly high yield at present. To support their argument say
that Board meetings of most of the companies are scheduled in December and a
large number of companies may declare very attractive dividend. They say that
last nearly 375 companies declared dividend amounting rupees 32 billion and
most of them announce similar result for the 2006, at least
Investment in mutual funds may be the best for individuals. Since mutual funds
have a diversified investment portfolio, selection of scrip is based on economic
fundamentals and managed; probability of substantial losses is relative low.
Analysts often suggest that investors must look towards equities market.
Cover story: Where to invest your money, 22nd October, 2006, page16
2.2 Investment opportunities in Pakistan:
A seminar organized by Harvest Group By Faraz Siddiqui
Pakistan is among the developing economies of world with emerging markets,
stock market is one of them. Emerging stock and forex markets in developing
countries have become an important and highly accepted investment tools. Due
to its significant Harvest Group has organized a seminar on Investment
Opportunities in Pakistan.
Presenting the introduction of Harvest Group, Mr.Ziaullah, Marketing Manager
Harvest Group said, Harvest Group is an international entity with specialized
services of Forex and securities trading. It was established in 1992 and in a very
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short of time it becomes a worldwide Forex and security brokerage house of
international standard. In Pakistan HG operates two partnerships Harvest Top
worth International (HTW) and Harvest Smartrend Securities (Pvt) Limited (HSS).
Bhatti further said, HTW is the Forex Brokerage Arm of Harvest Group which is
pioneer of Forex Brokerage in Pakistan with the largest setup. While HSS is a
stock brokerage house which offers a wide range of services for the investments
in the stock markets. He further said, HSS is the only stock brokerage house in
Pakistan Stock market information through Reuters Systems. Enlightening the
insights of exciting world of stocks, Humaira Jamil, Research Analyst at Harvest
Group Lahore, said, Pakistan has sample investment opportunities being an
emerging market. All the stocks markets in Pakistan are emerged markets. She
further said, stock business is highly regulated industry which is managed first by
stock exchange itself, then Central Depository System and finally Securities
Exchange Commission of Pakistan. From March 2000 onwards, KSE has been
facing huge losses but now market is slowly recovering and coming back on the
track. She further said, in depth analysis of the market behaviour reflects that
market has strength to sustain higher level with the years to come.
2.3 Where to Invest Your Money?
Attractive investment opportunities a must for boosting savings rate By shbbir h. Kazmi
Oct 30- Nov 05, 2000
Pakistan needs large scale investment for acceleration the economic growth rate.
The objective cannot be achieved without boosting investment in productive
activities. T quantum of investment is largely dependent on the savings rate that
is driven by the philosophy incentive for savings. The declining returns on
National Savings Schemes (NSS) and mark-up being paid by financial
institutions and high rate of inflation have become serious impediments for
boosting savings rate.
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Historically, people used to keep their savings with commercial banks either as
time deposits or in their savings accounts. Investments in NSS products,
currencies, gold, real estate and commodities were other available options.
However, with the recent declining trend in return on bank deposits and NSS
products, people are in desperate search for other alternatives. The quest is also
supported by the Supreme Court judgment regarding abolishing RIBA from the
economy. Even much earlier, than the day this judgment was announced, a large
number of people were in search if interest free financial products. There was a
pressure on financial institutions to come up with RIBA free products. Though the
initiative was taken as back as early eighties, the lack of commitment, uncertainty
and dearth of expertise did not allow the financial institutions in the country to
come up with financial products truly based on Islamic injunctions.
Investment in NSS products, despite yielding lower return, is still considered
most secure because of being backed by the government. The investors in these
products mainly comprise of widows, old people and those who are interested in
getting fixed and/or regular income. However, they feel a pinch now due to
reduction in rate of return.
Bank Deposits: Domestic and foreign commercial banks, put together, have an
elaborate network of branches throughout the country. Almost each bank has its
own niche market and has its own strength and weakness. Deposits with banks
are perceived secure. This perception has helped the banks in mobilizing low
cost funds and earn high yield by investing the funds in T-Bills/government
securities. In last couple of years the scenario has changed to a large extent.
With the growing competition among the banks in resource mobilization,
reduction in T-Bills yield, foreign currency deposits being expensive and low
demand for credit, the return on PLS account and time deposits are on a
constant decline and do not commensurate with the with the rate of inflation in
the country. However, as a result of the recovery campaign of November 1999
large scale restructuring of loans and change in the rules regarding provisions
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against doubtful loans, commercial banks are expected to pay better return on
deposits. To maintain deposits level almost every bank is trying to come up with
innovative financial products to suit the needs of various groups. Now financial
institutions offer various products which have the advantage of daily calculation
of mark-up to advance profit payment. This clearly indicates that these
institutions have realized the need of various income groups and have started
offering products to suit the needs of each group. Thanks to growing competition
foe resources mobilization that has also forced the banks to optimize operating
costs to enable themselves to offer competitive return. While the return on
deposits may be comparable, the inflow of deposits is dependent on a number of
other factors. These include: branch network, quality of service and other fringe
benefits. These factors often playa decisive role in selecting a bank or branch
when one has to make a selection.
After the freezing of foreign currency accounts in May 1998, the preference for
dollar deposits has come down considerably. Even the banks discourage
maintaining such accounts, at times, due to higher exchange risk cover. Some of
banking sector analysts says that it was not the rate of return on deposits but the
probability of gains due to persistent rupee depreciation that encouraged peopleto accumulate dollars. Yet another reason was preference of dollar deposits as
the most acceptable collateral by banks. The recent dollar buying spell was also
due to expectation of massive devaluation of rupee. The buying pressure led to
exchange rate volatility which further intensified the lust for accumulation of
dollars. However the volatility has reduced to a large extent and the difference
between kerb and official rates is expected to come down further once the inflow
from multilateral resumes.
Capital Market: As the returns are going down, it has become imperative that
people should not look towards bank deposits/NSS only. Mutual funds, equities
and debt instruments, currencies, real estate and gold should also be considered
for investment to maintain a diversified investment portfolio to earn higher return.
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Each option offers opportunities and has pitfalls. While services of investment
consultants may be available in the country, the ultimate responsibility of making
prudent decision lies with the investor. According to ARIF HABIB, Chairman,
Karachi Stock Exchange, with the increasing number of listed companies and
large capital base corporations the daily trading volume has increased manifold
over the years. It is mainly due to better market information, brokerage house
opening more and more branch offices and printing exhaustive reports about the
performance of listed companies. It is also because of improved infrastructure
and market efficiency. ARIF said that despite a negative perception about
equities market, performance of various sectors is worth mentioning. Net assets
values of a large number of companies have improved over the years. Still, many
scripts are selling at a discount and prices are very attractive. As the signs of
economic revival have started appearing there are prospects for better dividend
yield.
Over the last couple of years number of companies declaring cash dividend is on
an increase. To make the equities market more efficient and attractive the
Securities and Exchange Commission of Pakistan (SECP) is trying hard to play
its due role. This has improved corporate governance, encouraged greaterdisclosure and also helped in restoring confidence of investors. However,
according to ARIF, a lot has to be done to improve market efficiency. Creation of
Central Depository, KATS, display of real time information and monitoring of
brokers behavior have further consolidated the confidence of investors which will
lead to large investment in equities and debt instruments.
Debt instruments, mainly Term Finance Certificates (TFGS), have been floated.
They offer the advantage of fixed income. Individual investors are still reluctant to
invest TFGS due to support from secondary market. Mostly institutional investors
invest in these certificates. Globally the market is large in size as compared to
equities market, but it is the other way round in Pakistan.
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One of the reasons for lack of issuers is compulsory rating by an independent
credit rating agency. However some analysts strongly believe that disclosure is
the main issue. In Pakistan many listed companies prefer to publish the bare
minimum information in annual reports and would never like to make the
maximum disclosure. Such companies prefer to borrow from banks rather than
mobilizing resources from capital market. Another issue is credible track record
for credit rating. While there is no obligation for paying dividend to shareholders,
no issuer can avoid paying agreed return to TFC holders. According to DR.
AMJAD, Head of Assets Management, National Investment Trust, the analysis of
performance of bank deposits, gold, dollar, Defence Savings Certificates and
stock market for the last 25 years indicates the highest growth in investment in
stocks. However, he was skeptical that an individual who did not have thorough
knowledge of stock market might loose his money. In his opinion interest in
investment in stock is driven by the attitude towards risk, age of a person and
time horizon. Still the key factor affecting the return on investment is the
diversification of the portfolio. Dilating his point, he said that investment in open-
end mutual funds may be the best for individuals. The sale and repurchase price,
based on net assets value, is calculated on daily basis. This provides an
opportunity to investors to make capital gains besides earning regular dividendincome. Since an open-end fund is diversified, selection of Scripps is strictly on
the basis of economic fundamentals and it is also managed by professionals, the
probability of substantial losses is minimized.
Dr. Amjad has a point of caution for investors. In his opinion, the time horizon for
investors in equities market should be about three years. This period allows an
investor to earn a reasonable dividend as well as make capital gains. An analysis
of local equities market may indicate some spikes during three to six months
period. However, over a longer period the adverse impact of such surges is
minimized. He also suggested that old persons, who need regular and
guaranteed income, should not invest more than 30 percent to their total portfolio
in equities market and should invest preferable in fixed income securities. At
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present there are two open-end mutual funds in Pakistan, i.e. National
Investment Trust (NIT) and Unit Trust of Pakistan (UTP). As against this there
are 39 closed-end listed mutual funds. Out of these the largest number pertains
to the funds managed by the investment Corporation of Pakistan (ICP) and
remaining are managed by the private sector. An analysis of mutual funds
managed by ICP shows that at present all these funds are quoted/traded when
with net asset value. Another observation is that quoted price per share, in case
of a number of funds, is even below par value. This indicates a lack to interest of
investors in closed-end mutual funds.
According to HABIB-UR-REHMAN, Executive, ABAMCO, Investment in an
open-end fund is most suitable for individuals. If one looks at the number of
mutual funds operating globally it is amazing. For example, the first mutual fund,
Unit Trust of India, was established in India in 1964. The size of total mutual
funds in India at estimated over five trillion Indian rupees. Apparently, it looks
that individuals know very little about the advantages of investing in mutual funds
in Pakistan that was also confirmed by REHMAN. The largest investments in
mutual funds in Pakistan, at present, pertain to institutional investors. Whereas in
India mutual funds have grown in number and size mainly due to the Skeeninterest of individual investors who have realized the advantage on investing in
mutual funds. If one looks at the performance of mutual funds in Pakistan, it
generally reflects the performance of listed companies. The reason being that
these funds have invested mainly in equities. However, BSJS Balanced Funds
stands distinguished. As the name reflects, BSJS has made investment in a
diversified and balanced portfolio. It has made investment in equities, debt
instruments and money market, etc. Since its established it has been paying
regular dividend to its shareholders. As compared to this all hose funds that have
total investment in equities have been experiencing performance full of surges.
Other Options: A smaller segment of investors, which has large amount at its
disposal and also have strong holding power, have been investing in real estate,
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2.4 Ten Commandments:
Before you invest in any stock. Continuously review and disinvest if any
commandment gets violated.
Ten Commandments
1. Sector allocation: You shall allocate sector weightages that are different
from sensex lest you should not achieve the objective of limiting risk
requires you not to go gung-ho on some sectors as their fortunes change
without taking your permission.
2. Liquid and focused portfolio: You shall limit your portfolio to 10 and 10
stocks. All successful investors agree that an unwieldy portfolio is a sure
recipe foe below average returns. As all Homo sapiens can err, you shall
invest in stocks where exit is easy i.e. stocks with a minimum market
capitalization (we set the limit at Rupees 10mn) and have good liquidity
(average BSE turnover should exceed Rupees 10mn per day in the last 3
months).
3. Avoid tips: You shall not envy your friends getting rich if his/her sticks
appear to be rising faster than yours. You should not forget that can falleven faster. You shall fall in the trap of getting excited by every tip even if
it looks sexy by its performance in the last few days. None of your
investment decisions should violate any of the 10 commandments.
4. Leader only: You shall only buy companies that are leading in their
respective industries i.e. they should be in top 5 in the respective Indian
industry. An exception can be made only if there is a big turnaround or
restructuring story.
5. Management quality: You shall not buy companies run by managements that
have a track record of incessant equity dilution, talking up unrelated
projects, misleading investors by miscommunication or no proven track
record. The only exception you can make if you have a reliable report that
the management is changing.
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.
2.6 Einsteins Rule of 72
ByDr. J. Michael Hall (Doctors in Finance, Investment & Estate Planning), Mesa
(Phoenix, Scottsdale, Tempe Area) Arizona.
Einsteins RULE of 72 gives us an easy figure how long it takes to double our
money! Simply divide the rate of growth your money is earning into 72.
Example:
If you have $ 10,000 in a savings account at a bank, earning you 2.5%, Divide
2.5% into 72=58.8 years money (This shows why Einstein said, If people really
understood the Rule of 72 they would never put their money in Banks!) If you
have $ 10,000 invested in an investment that return 18% Divided 18% into 72=4
years to double your money! Knowing this, why would you put money in a bank!
Its probably the place to put it. They seldom pay over 3-4%, even in C.D.s.
There are MUCH better places to put your money, as youll soon see.
2.7 Stocks or bonds?
1. Are bonds subject to the same market fluctuation as sticks?Stocks are subject
to two kinds of market fluctuations: one, fluctuation in earnings, and two,
fluctuation in interest rates, i.e. fluctuation in the value of money. Bond,
on the other hand (at least, T-bonds), are subject only to fluctuations in
interest rates. However, there are empirical relationships between the
level of business activity and interest rates, which vary other the business
cycle. Hence, T-bonds will also be indirectly affected by fluctuation in
corporate earnings, through their effect on interest rates.
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Consider placing some money in employers stock, but dont invest more than 10
percent of your equity holdings in your companys stock if your company hits
hard times, you can get hit with double whammy. The stock price falls, you lose
your job
If your company offers you stock options as an incentive with little or no cost to
you, take them But invest the rest of your portfolio in other assets so that it your
company went bankrupt, youd still be OK
The best way to minimize your risk: Invest in a broadly diversified portfolio Diversify
across asset classes:
Stocks
Bonds
Real estate
Diversify within asset classes
Large company stock
Small company stocks
Foreign stocks
Dollars cost average Bond laddering
Example of how diversifications reduce your risk without reducing your return
Studies show that typical returns for individual stock ranges between -40 to +60
percent per year So dont be impresses if a broker tells you about a stock that
she picked went up 50 percent It happens all the time Returns for the market as
a whole range between -7 to +27 percent per year By investing in a broad-based
mutual fund, you enjoy the same average gain, over time, as if you invested in a
few individual stocks, but with less volatility
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03. FINANCIAL SYSTEM
3.1 The Financial System
Such systems are very important in the economy for they play a critical role in
igniting industrialization by facilitating the mobilization of capital for immense
works. Well-functioning financial institutions spur technological innovation by
identifying and funding those entrepreneurs with the best chances of successfully
implementing innovative products and production processes. It has been said
that where enterprise leads finance follows. According to this view, economic
development creates demands for particular types of financial arrangements, and
the financial system responds automatically to these demands. There is a belief
that the development of financial markets and institutions is a critical and
inextricable part of the growth process. There is evidence that the level of
financial development is a good predictor of future rates of economic growth,
capital accumulation, and technological change. Financial market development
or the lack thereofcrucially affects the speed and pattern of economic
development.
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3.2The Functions of the Financial System
The costs of acquiring information and making transactions create incentives for
the emergence of financial markets and institutions. Put differently, state-
contingent claim framework with no information or transaction costs, there is no
need for a financial system that expends resources researching projects,
scrutinizing managers, or designing arrangements to ease risk management and
facilitate transactions. Different types and combinations of information and
transaction costs motivate distinct financial contracts, markets, and institutions.
In arising to ameliorate transaction and information costs, financial systems serve
one primary function: they facilitate the allocation of resources, across space and
time, in an uncertain environment.
The primary functions of a financial system can be divided into five basic
functions:
facilitate the trading, hedging, diversifying, and pooling of
risk, allocate resources,
monitor managers and exert corporate control,
mobilize savings, and
Facilitate the exchange of goods and services.
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Fig 3.1 - Theoretical Approach to Finance and Growth
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Market Frictions
- Information costs- Transaction costs
Financial markets andIntermediaries
Financial Functions- Mobilize savings
- Allocate Resources- Extent corporate control
- Facilitate risk mgmt- Ease trading of goods,
services ,contracts
Channels to growth
- Capital accumulation- Tech. innovation
Growth
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The importance of financial markets is also apparent when considering the
development of a non-market economy. This economy has no mechanism for
determining the value of goods and services. These values are determined by
central government bureaucracies. The result of foregoing markets that provide
information on the supply-and-demand interaction for goods and services is the
mis-pricing of most goods and services. This leads to waste. Many goods are
produced even thought here is no market for t hem. Other goods are produced
using very costly materials, when less expensive substitutes could be used. This
also leads to the well-known shortages. The price is low, but goods are not
available. Creating a market economy in goods and financial claims is a solution
to many of these problems.
Thus to summarize it can be said that the financial markets are important for a
few of the following reasons:
To provide information on past and present prices and trading
volume
To reduce search costs by bringing buyers and sellers together
To provide for standardization of contracts
To reduce (transfer) credit risks for buyers and sellers to reduce
information asymmetry.
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Some of the reasons responsible for the abnormal behavior of the equity markets
include the following:
1. Delay in the privatization of government owned companies
2. Withdrawal of funds by financiers
3. Excessive buy positions by several brokers in the future market who were
not able to get an exit opportunity due to the continuous decline in the
market
4. Sellers in the March future contract were carrying hedged position from
ready market
5. Seller decided not to square up their positions in the March futures
contract
6. Downward circuit breakers blocked the opportunity of exit from the market.
Islamabad Stock Exchange: The Islamabad Stock Exchange (ISE) was incorporated
as a guarantee limited Company on 25th October, 1989 in Islamabad Capital
territory of Pakistan with the main object of setting up of a trading and settlement
infrastructure, information system, skilled resources, accessibility and a fair and
orderly market place that ranks with the best in the world. The purpose forestablishment of the stock exchange in Islamabad was to cater to the needs of
less developed areas of the northern part of Pakistan. The ISE has set the
highest standards of operational efficiency and is committed to support a climate
of confidence and optimism that encourages and promotes trading activity.
It also provides for reasonable conducive environment to channalize the small
investments of the residents of less developed areas. The ISE offers an easy
access to both domestic as well as foreign investors and actively encourages the
listing of eligible and profitable companies, both large and small to make it an
exciting and diverse Exchange. The Exchange is playing a pivotal role for
economic growth of the area thereby contributing towards the overall economic
prosperity and welfare of the country.
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At present there are 104 members out of which 39 are corporate bodies including
commercial and investment banks, DFIs and brokerage houses. The other 65
Members are individual persons who are well educated, enterprising and
progressive minded. The affairs of the Exchange are governed by the Board of
Directors. The Board of Directors consists of ten directors, of which five are
elected member directors and four are non-member directors nominated by the
SECP while the managing director by virtue of his office is the tenth director of
the Board. In order to protect the interest of the investing public, an Investors
Protection fund has been established by the Exchange.
Since the inception of automated trading system (ISECTS), the trade volume has
been multiplying day by day and the average daily turnover has now crossed the
figure of 10 million shares. The automated system which was indigenously
developed, replaced the outcry system in 1997. Now all the listed securities are
traded through the ISECTS. The system of physical handling of shares and
securities has been phased out and majority of the scripts are settled through
Central Depository Company of Pakistan Limited.
In comparison with major financial markets around the World, the functioning of
capital market in Pakistan is still very much in its infancy and lacks advanced
technology. In this context efforts are being made to bring ISE in line with the
International system and methodology.
The turnover of shares on the Islamabad Stock Exchange (ISE) was 2.8 billion
shares during July-March 2004-05 as compared to 1.5 billion during the same
period last year. The ISE Network index has increased from 11894 points in June
2004 to 12894 points in March 2005, recording a growth of 8.4 percent. Eight
new companies were listed and Rs 18.8 billion was mobilized on the ISE during
the first nine months of the current fiscal year. The ISE started functioning in
August 1992 and within 14 years; it has developed into a vibrant, efficient and
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stable market. Today, the ISE is one of the premier stock exchanges of the
country known for the highest standard of transparency in its operations,
excellent risk management, dynamic market technology and lowest overall costs
of listing.
Profile of Islamabad Stock Exchange
-
Lahore Stock Exchange: Lahore Stock Exchange (Guarantee) Limited came
into existence in October 1970, under the Securities and Exchange Ordinance,
1969, of the Government of Pakistan, in response to the needs of the Provincial
metropolis of the Punjab. Only 83 members had its memberships and it was
housed in a rented building in the crowded area of Bank Square in exotic city of
Lahore. The number of members has increased from 83 to 150 over a period of
25 years. Inadequacy of space, crowded area and severe limitations of
communications cramped its growth. Only a few of all the members were active,
and they too had to work through Karachi Stock Exchange, or be limited to do
business in Bonus, Vouchers and Bonds.
It took the management all of two decades of uncertainties, apprehensions andplanning to construct a suitable building for itself and venture out to its present
location at 19-Khayaban-e-Aiwan-e-Iqbal, Lahore. Lahore Stock Exchange has
taken shape of a significant institution of Pakistan. It owes a debt of gratitude to
its past presidents and members of the Board who had contributed their time and
energy to realize the dreams of the LSE members. The turnover of shares on the
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Lahore Stock Exchange (LSE) during July-March 2004-05 was 14.0 billion
compared to 34.5 billion shares in the same period last year. Total paid up capital
with the LSE increased from Rs 361.5 billion in June 2004 to Rs 387.6 billion in
March 2005.
The LSE index, which was 2828 points in June 2004, increased to 4011 points in
March 2005. The market capitalization of the LSE has increased from Rs 1460
billion in June 2004 to Rs 2088 billion in March 2005. Seven new companies
were listed with the LSE during July-March 2004-05, as compared to nine in the
same period last year. The amount of funds mobilized at the LSE by way of
subscription was Rs 37.2 billion in the first nine months of the outgoing fiscal
year.
Profile of Lahore Stock Exchange
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Karachi Stock Exchange: Karachi Stock Exchange is the biggest and most
liquid exchange and has been declared as the Best Performing Stock Market of
the World for the year 2002. As on June 30, 2010; 645 companies were listed
with the market capitalization of Rs. 2,068.19 billion (US $ 34.70) having listed
capital of Rs. 438.49 billion (US $ 7.36 billion). KSE has been well into the 4th
year of being one of the Best Performing Markets of the world as declared by the
international magazine Business Week. Similarly the US newspaper, USA
Today, termed Karachi Stock Exchange as one of the best performing bourses in
the world.
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Five Year Performance of KSE:
In million except companies, index and bonds data
5 YEARS PROGRESS 2006-2010
Upto
30-12-2006
Upto29-12-2007
Upto31-12-2008
Upto31-12-2009
Upto03-12-2010
Total No. of Listed Companies 652 654 653 651 645
Total Listed Capital - Rs. 519,270.17 671,255.82 750,477.55 814,478.74 914,608.13
Total Market Capitalisation - Rs.2,771,113.9
44,329,909.7
91,858,698.9
02,705,879.8
33,112,350.0
6
KSE-100TM Index 10040.50 14075.83 5865.01 9386.92 11406.66
KSE-30TM Index 12521.54 16717.10 5485.33 9849.92 10993.62
KSE All Share Index 6770.06 9956.76 4400.76 6665.55 7935.97
New Companies Listed during the
year 9 14 10 4 6
Listed Capital of New Companies -Rs.
14,789.76 57,239.92 15,312.12 8,755.73 33,438.45
New Debt Instruments Listedduring the year
3 3 7 1 4
Listed Capital of New DebtInstruments - Rs.
3,400.00 6,500.00 26,500.00 3,000.00 5,650.18
Average Daily Turnover - Shares inmillion
260.69 268.23 146.55 179.88 132.43
Average value of daily turnover -Rs.
31,610.71 25,262.97 14,228.35 7,450.75 4,340.64
Average Daily Turnover (FutureTM)YTD
82.68 61.69 30.76 1.03 4.56
Average Value of Daily Turnover -YTD
13,587.63 9,077.61 5,229.97 89.66 385.75
Foreign Investment in Securities Market
Inflow - Rs - - - - -
Outflow - Rs - - - - -
Net Inflow/(Outflow) - Rs - - - - -
Today KSE has emerged as the key institution of the capital formation in
Pakistan with:-
Listed companies 659, securities listed on the
exchange 700: ordinary share 659, Preference
shares 15 and debt securities (TFC's) 26.
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Listed capital Rs.438,489.99 million (US$ 7,357.21
million).
Market capitalization Rs.2,068,187.15 million (US$
34,701.13 million)
Membership strength at 200.
Corporate Members are 112 out of which 9 are
public listed companies
Active Members are 155.
Fully automated trading system with T+3
settlement cycle.
Deliveries through central depository company
National Clearing and Settlement System in place.
KSE began with a 50 shares index. As the market grew a representative index
was needed. On November 1, 1991 the KSE-100 was introduced and remains to
this date the most generally accepted measure of the Exchange. The KSE-100 is
a capital weighted index and consists of 100 companies representing about 88
percent of market capitalization of the Exchange.
The market performance during the period June 1998 to April 2005 is given
under.
Performance of KSE
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The KSE is primarily influenced by some big blue chip companies including;OGDC, PTCL, Pakistan State Oil etc. During the first three quarters of the current
fiscal year, the combined turnover of shares of ten big companies (OGDC, PTCL,
A Pakistan PTA Ltd., Sui Southern Gas, FF Bin Qasim, D.G. Khan cement,
Fauji Fertilizer Bin Qasim, Fauji Cement and National Bank, Pakistan State Oil
and TRG Pakistan Ltd.) was 12.59 billion, which constituted 17.6 percent of the
total turnover of the KSE. These ten companies earned a profit after taxation of
Rs 65.22 billion in the current fiscal year up to March 2005. Out of Rs 65.22
billion after taxation profit, the share of PTCL and OGDC was Rs 51.58 billion
representing 79.1 percent of the ten big companies. In the first nine months of
2004-05, PTCLs after taxation profit was (Rs 29.2 billion). The price-earning ratio
of the ten big companies ranged from 50.5 in the case of TRG Pakistan Ltd. to
21.4 in respect of OGDC. This indicates that the business environment in the
current fiscal year has improved appreciably.
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Profile of Karachi Stock Exchange
4.2 Sector Wise Investment :
During the first nine months of the outgoing fiscal year, the KSE 100-share index
and aggregate market capitalization of 12 different sectors have increased by
47.2 percent and 55.8 percent respectively, as against their increase of 50.1
percent and 78.3 percent in the same period last year. Total turnover of shares
on the KSE was 71.7 billion in the first nine months of 2004-05 as compared to
65.2 billion in the same period last year. Funds mobilized by the KSE during this
period amounted to Rs 34.1 billion as compared to Rs 61.7 billion in the same
period last year.
All but two of the 12 major trading groups on the KSE (cotton and other textiles,
pharmaceuticals & chemicals, auto & allied, cables and electric goods, paper and
board, cement, fuel and energy, transport and communication, banks and other
financial institutions, and miscellaneous) witnessed growth in their share indices,
ranging from 0.5 percent (banks and other financial institution) to 63.7 percent
(fuel and energy). Two sectors namely engineering and sugar & allied
encountered slight declines in their share indices. During the calendar year 2009,
total profit before taxation of the 12 trading groups amounted to Rs 229.5 billion
as compared to their before taxation profit of Rs 136.8 billion in 2003. The
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performance of leading trading groups and companies for the first nine months of
the outgoing fiscal year is discussed below
Sectoral Performance of KSE:
SECTOR
CODESECTOR NAME TURNOVER
0530 Oil and Gas 8,140,964
1350 Chemicals 19,714,611
1730 Forestry and Paper 48,834
1750 Industrial metals and Mining 252,550
2350 Construction and Materials 3,333,756
2720 General Industrials 392,567
2730 Electronic and Electrical Equipment 5,619
2750 Industrial Engineering 153,674
2770 Industrial Transportation 5,859
2790 Support Services 731,409
3350 Automobile and Parts 162,848
3530 Beverages 4,902
3570 Food Producers 273,799
36 BONDS 0
3720 Household Goods 239,1763740 Leisure Goods 50
3760 Personal Goods 13,614,543
3780 Tobacco 375,213
4530 Health Care Equipment and Services 49
4570 Pharma and Bio Tech 43,336
5550 Media 1,552
5750 Travel and Leisure 145,825
6530 Fixed Line Telecommunication 1,325,195
7530 Electricity 3,762,911
7570 Gas Water and Multiutilities 899,7138350 Banks 11,872,946
8530 Non Life Insurance 1,075,756
8570 Life Insurance 159,110
8630 Real Estate Investment and Services 994,913
8770 Financial Services 15,859,817
8980 Equity Investment Instruments 2,387,467
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Cement: At the end of 2009, there were 21 cement companies listed with the
KSE. The cement industry was one of the best performing sectors in the stock
market. Its market capitalization increased to Rs 75.5 billion on March 31, 2010
from Rs 65.1 billion in June 2009, recording a growth of Rs 16.0 percent.
Fuel & Energy: A total of 26 companies were listed with the KSE. It is the most
dominant group in the stock market. Its share index grew by 63.7 percent during
the first nine months of the current fiscal year, which was the highest among the
12 trading sectors. Its market capitalization increased by a huge Rs 423.3 billion
to Rs 909.0 billion in March 2010 from Rs 485.8 billion in June 2004. Its market
capitalization constituted 43.0 percent of the aggregate market capitalization in
March 2010. In the corresponding date of the last year market capitalization of
this group was 37.2 percent. A swelling fuel and energy sector continued to be
one of the major market players in the current year along with transport and
communication, banking and finance, and cement. The energy sector has been
identified as an engine of growth along with 3 other sectors, (agriculture, small
and medium enterprises and information technology) by the government.
Companies like OGDC, PSO, SNGC, SSGC, Hub Power, and Pakistan Oil Fields
etc. led the current years upsurge in the s tock market. These companies werethe main drivers of the stock market.
Transport & Communication:At the end of 2004, there were 14 companies of this
group listed with the KSE. Its share index and market capitalization increased by
54.9 percent and 60.0 percent respectively during July-March 2009-10 as
compared to their rises of 36.3 percent and 49.3 percent respectively in the same
period last year. Its market capitalization at Rs 309.7 billion constituted 14.6
percent of the aggregate market capitalization (AMC) in March 2010 making it a
major player on the KSE. The combined market capitalization of fuel and energy,
and transport & communication was Rs 1218.7 billion on March 31, 2010, which
constituted 57.6 percent of the AMC (Rs 2114.8 billion) as compared to their
share of 51.0 percent on the corresponding date of last year.
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Banks & Other Financial Institutions: In December 2009, a total of 159 companies
were listed with the KSE. There are 4 sub groups in this group: banks &
investment companies, modarabas, leasing companies, and insurance. During
the current fiscal year, the share index of this group has marginally increased by
0.5 percent. Its market capitalization however increased by 59.8 percent or from
Rs 187.1 billion in June 2009 to Rs 299.0 billion in March 2010.
Miscellaneous: The miscellaneous group includes five sub-groups: jute, food &
allied, glass & ceramics, vanaspati & allied, and others. In December 2003, a
total of 92 companies were listed with the KSE, which came down to 89
companies at the end December 2004. Its share index and market capitalization
posted growth of 9.6 percent and 10.5 percent respectively in the first nine
months of the current fiscal year, as compared to their growth of 31.6 percent
and 38.5 percent respectively, in the same period last year.
4.3 Present and Future Prospects
Foreign investors are pushing funds back into Pakistan stocks, setting the market
up for its second-best year for inflows in a decade, drawn by cheap valuations
and some economic and security improvements.
Such investments may be paying off as well because the main Karachi stock
index .KSE is one of the few markets in Asia showing a rise since the beginning
of the year.
While the benchmark MSCI Asia ex-Japan index is down 11 percent this year,
the KSE is up 3 percent.
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"Pakistan remains one of the cheaper markets in Asia and emerging markets
with an improving domestic situation and a stabilising economy," said Mark
Mobius, executive chairman at Templeton Asset Management Ltd.
Net foreign portfolio investment into the stock market reached more than $530
million (362 million pounds) in the first 11 months of 2009/10, compared with a
year-earlier outflow of $408 million.
If that holds to the end of the July-June fiscal year, it would mark the biggest net
foreign investment in more than 10 years, apart from 2007.
The government has pulled back from the brink of a debt default thanks to
International Monetary Fund emergency funding and is seeing some success in
military operations against Taliban militants behind bomb attacks across the
country.
A government led by the party of assassinated former prime minister Benazir
Bhutto has proven more resilient than critics predicted and recently introduced
constitutional reforms to bolster parliamentary rule, and stability.
The powerful military, which has ruled for more than half of Pakistan's history, is
seen as largely satisfied with the civilian government and loathe to step back in
to politics while it hands are full battling militancy.
The economy is also pulling out of the global downturn and this year the
government expects growth above 4 percent compared with record low growth
last year of 1.2 percent.
The Karachi stock market .KSE has more than doubled from lows hit last year
during the worst of the global crisis, although many stock markets have seen
similar gains.
To be sure, Pakistan remains one of Asia's riskiest investment destinations,
Reuters surveys show.
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That's why most foreign money goes into energy stocks or fertiliser company
Engro Chemicals (EGCH.KA). Apart from having cheaper valuations compared
with many regional peers, they offer the liquidity foreign investors need should
they decide to sell.
Al Qaeda-linked Taliban militants remain a serious threat despite the military's
successes, and chronic power cuts and rising prices are eroding the
government's support. There remains criticism of a lack of policy stability.
In addition, the inflow figures have been flattered by the lifting of a KSE trading
floor, which had stopped investors selling below 9,144 points between August
and December 2008.
Brokerage Invest and Finance Securities Ltd says the lowest one-year forward
price-to-earnings ratio in Asia of just 6.25 is also drawing funds. That's less than
half China's level, it says.
"Of course investors are interested in seeing fewer terrorist attacks, but many
investors have become inured to such situations knowing that they are isolated
incidents," Mobius said in late May. Foreign direct investors seem less confident.
Actual FDI has almost halved to $1.77 billion in the first 10 months of 2009/10
compared with $3.20 billion a year earlier. Such FDI would be the lowest level
since year ending June 30, 2004 when it was $949 million.
Asad Iqbal, chief investment officer at Faysal Asset Management Ltd, said that
apart from obvious security concerns, FDI is a victim of ever-changing
government policies.
He cited export tax on yarn. The government raised it to 15 percent last month
only to reverse the decision in the budget Saturday.
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But it is an odd reaction from a community which has long pointed fingers at
wealthy landowners for remaining exempt from paying an income tax. Farm
incomes in Pakistan for long have been exempt from paying Karachi stock
exchange (KSE), to help stem a slide in share prices.
It is an unusual move for the tax authorities to become involved in affairs of the
stock market. But there is a good reason. In the past two days alone, the KSE
lost about 2 per cent of its net value as nervous investors rushed to sell their
shares in reaction to this weeks withdrawal of a tax exemption on stock market
profits.
Knowledgeable insiders an income tax, prompting criticism from urbanites. And
yet, Pakistans very future depends on its ability to make its wealthy elite pay
their dues. As the country battles Taliban and Al-Qaeda militants across its
frontier lands along the Afghan border, its internal economy has eroded badly.
Basic services such as education and health remain sorely neglected and
increasingly out of reach for the poor.
Pakistans tax to GDP ratio at about 9 per cent is the lowest among its south
Asian peers. Equally appalling is the figure that just over 1 per cent of thepopulation pays an income tax.
Its clear that the ability of this nuclear-armed south Asian country to progress
depends on clamping down on those who evade taxes. If the tax authorities
decide on Saturday to back off from taxing stock market gains, it wont just mean
the unraveling of a long overdue effort at reform. It will become even harder to
tax other parts of the economy including the rich rural landowners.
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06. REASEARCH ANALYSIS
6.1 Questionnaire Analysis:
1. Do you invest in any of financial instrument/scheme other then stock?
Number of
Respondent
Percentage Male Female
Yes 9 33.3% 6 3No 17 63.0% 11 6Dont Know 1 3.7% 0 1
Didnt Reply 0 0.0% 0 0Total 27
2. Are you planning to invest within few years?
Number of
Respondent
Percentage Male Female
Yes 10 37.0% 7 3No 7 25.9% 5 2Dont Know 2 7.4% 1 1Didnt Reply 8 29.6% 4 4Total 27
3. Which type of investment (Stocks, bond, saving certificate etc) you would
prefer the most?
Number of Percentage Male Female
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Respondent
Stocks 6 22.2% 4 2Bonds 4 14.8% 2 2Saving
Certificate
6 22.2% 3 3
Others 11 40.7% 8 3Total 27
0
2
4
6
8
10
12
Stocks
Bon
ds
SavingC
ertificat
Others
Series1
4. Attitude towards investment risk, select one .
Number of
Respondent
Percentage Male Female
Conservative 2 7.4% 1 1Cautious 7 25.9% 6 1Balanced 10 37% 4 6Adventurous 1 3.7% 0 1
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Expected Rate of Return
0
2
4
6
8
10
12
14
Lowest Low Average High Highest Didnt
reply
Series1
6. Do you know where the Karachi Stock Exchange building is situated?
Number of
Respondent
Percentage Male Female
Yes 21 77.8% 15 6No 4 14.8% 1 3May be 1 3.7% 0 1Didnt reply 1 3.7% 1 0Total 27
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7. Do you know how Karachi Stock Exchange works?
Number of
Respondent
Percentage Male Female
Yes 8 29.6% 6 2No 11 40.7% 6 5Partially 8 29.6% 5 3Didnt reply 0 0.0% 0 0Total 27
0
2
4
6
8
10
12
Yes No P artially Didnt reply
8. Do any of your family members or friend trades in Stocks?
Number of
Respondent
Percentage Male Female
Yes 12 44.4% 7 5No 14 51.9% 9 5Didnt reply 1 3.7% 1 0Total 27
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9. Does Newspaper listing ( Stock related coverage given in newspaper ) help
you in understanding Stock Function?
Number of
Respondent
Percentage Male Female
Yes 6 22.2% 3 3No 10 37.0% 6 4Slightly 9 33.3% 6 3Didnt reply 2 7.4% 2 0Total 27
Is Newspaper listing helpful?
10. Do you think there is enough material ( books/Magazines) available to assist
you in getting information about stock market ?
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0
2
4
6
8
10
12
Yes No Slightly Didnt
reply
Series1
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A w a re n e s s L e
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
Y es N o P art ia lly D idn t
reply
b rokerage sy s t
S to ck S p e cu l a t
Div idend syste
Bear /Bu l l sys te
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M o n ey R eq u ire to s ta r t trad e in S to
0
1
2
3
4
5
6
78
9
B e l ow
10,000
10 ,001-
15 ,000
15 ,001-
20 ,000
20 ,000-
25,000
Above
25000
Didn t reply
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44.40%
51.90%
37.00%
25.90%
63.00%
48.10%
25.90%
33.30%
25.90%
18.50%
0.00%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
Lackof
Knowledge
about
VeryRisky
Notallowed
inIslam
Stock
speculation
Economyof
Country
Law
&
Order
Fraudfrom
brokerside
Fraudfrom
company
Environment
ofStock
exchange
Other
Factors
Didntreply
Series1
19. Do educational institutes provide adequate knowledge about stock markets?
Number of
Respondent
Percentage Male Female
Yes 5 18.5% 3 2No 8 29.6% 5 3Dont Know 13 48.1% 8 5Didnt Reply 1 3.7% 1 0Total 27
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20. Age
Number of
Respondent
Percentage Male Female
Less than 18 0 0.0% 0 018-25 years 20 74.1% 13 726-35 years 4 14.8% 2 2More than 35 3 11.1% 2 1Didnt Reply 0 0.0% 0 0Total 27
21. Gender
Number of
Respondent
Percentage
Male 17 63.0%Female 10 37.0%Total 27
22. What is your annual income ?
Number of Respondent Percentage Male Female
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Below 10,000 4 14.8% 3 110,001-15,000 4 14.8% 2 215,001-20,000 4 14.8% 3 120,000-25,000 3 11.1% 2 1Above 25000 12 44.4% 7 5
Didnt reply 0 0.0% 0 0Total 27
23. Education
Number of Respondent Percentage Male Female
Below Higher
Secondary
0 0.0% 0 0
Highere
secondary / A-
level
8 29.6% 6 2
Bachelors 12 44.4% 7 5Masters 7 25.9% 4 3Other 0 0.0% 0 0Didnt reply 0 0.0% 0 0Total 27
07. CONCLUSION AND RECOMMENDATIONS
7.1 Conclusion:
Most of the people are aware of stock market and they consider it as one of the
popular investment medium but they are not very much familiar with the
procedures, segments and functions of stock market. This lack of specific
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information about stock functionality exaggerates the present fear of stock
market.
People trust more on magazines and financial books then newspapers in making
investment decision. Mostly investors keep balance or cautious risk strategy, and
want high return on their investment. Stock has the potential to provide higher
return on any investment comparative to other security but it also carries higher
risk. Awareness level of stock market is low regardless of daily listing in
newspaper. People have not seen any major advertisement of stocks.
Economy of the country is the major factor that prevents investors from investing
in stock market, other then that volatile nature of stock market and law order
situation plays its part in hindering investors to invest in stock market. Knowledge
about Stocks is the fourth important factor that stops investor.
7.2 Recommendations:
Following are some recommendations that may be helpful for attracting
investors:
1. Economy of the country is the major factor for any investment. Smooth
economy will definitely generate more investment in stock market.
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2. Newspaper listing is not much helpful to people. It should be reformatted
to make it understandable to general people.
3. People trust on books and magazines. They can play important role in
educating people about stock market. Magazines and financial book
should easily available to general mass and they should contain up-to-
date information, which help investor in evaluating opportunity.
4. There is no particular advertisement of stocks. There should be proper
advertisements which encourage new people to invest in stock market.
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BIBLIOGRAPHY
Books:
Brigham, C. Ehrhardt (2003). Financial Management, theory and Practice,
11th edition.
Frederic S. Mishkin (2008).The Economics of Money, Banking, &Financial
Markets, Seventh Edition, Addison-Wesley, Boston, MA, latest edition.
Web sites:
http://www.brecorder.com/news/statistics/indicators/
http://www.eagletraders.com/books/afm/afm2.htm
http://www.finance.mapsofworld.com/
http://www.investorguide.com/igu-article-286-basic-economic-concepts-
introduction-to-inflation-and-its-impact.html
http://www.opfblog.com/2037/inflation-in-pakistan-%E2%80%94-who-to-
blame/
http://www.statpak.gov.pk/depts/fbs/statistics/price_statistics/methodology
_pri
ce_statistics.html
http://www.sbp.org.pk/reports/annual/
http://www.statpak.gov.pk/depts/fbs/statistics/price_statistics/methodology
_pri
ce_statistics.html
http://www.stockmarkettiming.com/psp.html
http://www.econ.iastate.edu/classes/econ308/tesfatsion/finintro.htm
http://useconomy.about.com/od/themarkets/a/capital_markets.htm
http://www.learningtree.com/investor/index.htm
http://www.nasdr.com
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http://useconomy.about.com/od/themarkets/a/capital_markets.htmhttp://www.learningtree.com/investor/index.htmhttp://www.nasdr.com/http://useconomy.about.com/od/themarkets/a/capital_markets.htmhttp://www.learningtree.com/investor/index.htmhttp://www.nasdr.com/ -
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www.jang.cm.pk/thenews.html
www.brecorder.com
www.nation.com.pk
www.dawn.com.pk
www.dailytimes.com.pk
www.kse.com.pk
www.ise.com.pk
www.lse.com.pk
www.investopedia.com
www.frbsf.org/ecomics/
www.accountancy.pk
www.finance.gov.pk
www.jstor.org
www.wikipedia.com
www.surveysystems.com
www.en.mini.hu/stockmarket/stock.html
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http://www.jang.cm.pk/thenews.htmlhttp://www.brecorder.com/http://www.nation.com.pk/http://www.dawn.com.pk/http://www.dailytimes.com.pk/http://www.kse.com.pk/http://www.ise.com.pk/http://www.lse.com.pk/http://www.investopedia.com/http://www.frbsf.org/ecomics/http://www.accountancy.pk/http://www.finance.gov.pk/http://www.jstor.org/http://www.wikipedia.com/http://www.surveysystems.com/http://www.en.mini.hu/stockmarket/stock.htmlhttp://www.jang.cm.pk/thenews.htmlhttp://www.brecorder.com/http://www.nation.com.pk/http://www.dawn.com.pk/http://www.dailytimes.com.pk/http://www.kse.com.pk/http://www.ise.com.pk/http://www.lse.com.pk/http://www.investopedia.com/http://www.frbsf.org/ecomics/http://www.accountancy.pk/http://www.finance.gov.pk/http://www.jstor.org/http://www.wikipedia.com/http://www.surveysystems.com/http://www.en.mini.hu/stockmarket/stock.html -
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QUESTIONNAIRE1. Do you invest in any of financial instrument/Scheme other then Stocks? Yes No Dont knowIf you do invest in any security then GOTO Question#4
2. Are you planning to invest within few years? Yes No Dont know
3. If you do invest in then which type of investment (Stock, bonds, savingCertificates etc) you would prefer the most? Specify
4. Attitude towards Investment Risk, select one Conservative Cautious Balanced Adventurous Speculative
5. How much return would you expect of your investment?LowestLowAverageHighHighest
6. Do you know where the Karachi stock exchanges building is? Yes No
May be
7. Do any of your family members or friend trades in stocks? Yes No
8. Do you know how the Karachi Stock Exchange works? Yes
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5000-10000 10001-20000 20000-30000 ABOVE 25000
18. What are the factors, which stops you from investing in stocks? Check asmany, Lack of Knowledge about Stocks Very Risky Not allowed in Islam (Satta) Stock SpeculationEconomy of Country Country law and order situation Fraud from Brokerage Side Fraud from Company side Environment of Stock Exchange
Other. Specify
19.Do educational institute provides adequate teaching about stock markets? Yes No Dont know
Personal Information
20.Age Less then 18
18-25 YEARS 26-35 YEARS MORE THAN 35
21. Gender Male Female
22.What is your annual income?| Below 10000 10000-15000 15000-20000 20000-25000 ABOVE 25000
23.Education Below Higher Secondary Higher Secondary/ A Level Bachelors
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Masters Other Specify