CHAPTER 5 EQUITY TRADING PRACTICES OF RETAIL INVESTORS IN VISAKHAPATNAM CITY

Transcription

1 CHAPTER 5 EQUITY TRADING PRACTICES OF RETAIL INVESTORS IN VISAKHAPATNAM CITY The analysis of the equity trading practices of retail investors in Visakhapatnam city related is presented in this chapter. 5.1 PERIOD OF ENTRY INTO EQUITY MARKETS In this section an attempt is made to present the period of entry of the retail investors into the equity markets. Data relating to distribution of select retail investors according to period of entry into equity markets is presented in Table 5.1

2 TABLE 5.1 DISTRIBUTION OF SELECT SAMPLE OF INVESTORS ACCORDING TO PERIOD OF ENTRY INTO I EQUITY MARKETS Period of Entrance in Capital Market Before After (9.4) 156 (12.8) 150 (12.3) 795 (65.4) 1215 Note : Figures in the parenthesis indicate percentages to the column total It can be observed from Table 5.1 that i) The majority of investors (65.4%) in Visakhapatnam city had entered into the equity markets after the year II) Around 20% of the investors have entered into the equity markets prior Thus the present study gains a lot of importance as it focuses on analyzing the various characteristics of the retail investors who entered into the market in recent times. The results of the study help the policy makers to take requisite measures to make the investors stick to the equity markets.

3 5.2 TRADING CHANNEL EMPLOYED IN STOCK TRADING In this section an attempt is made to analyze the equity trading practices of retail investors according to the trading channel employed in stock trading and age, education, occupation, income, gender and stage of life cycle of the investors Trading Channel employed in stock trading and age group of the Investors : Data relating to distribution of select retail investors according to the trading channel employed and age are presented in Table TABLE TRADING CHANNEL EMPLOYED IN STOCK TRADING AND AGE Trading Channel Below Age group Above 60 Broker Firms (55.3) (84.8) (66.7) (75.8) (95.8) Banks (0.9) (1.8) (14.3) (9.1) (0.0) Broker Firms and Banks (27.2) (13.5) (9.5) (15.2) (4.2) Friends/Relatives (16.7) (0) (9.5) (0) (0.0) Note : Figures in the parenthesis indicate percentages to the column total 894 (73.6) 48 (3.9) 198 (16.3) 75 (6.2) 1215

4 From the Table it cab be observed that i) The majority of the investors (73.6%) trades through broker firms followed by broker firms and banks (16.3%). ii) A good number of investors (55.3%) in the age group of below 30 trades through broker firms followed by broker firms and banks (27.2%). iii) The majority of the investors (84.8%) in the age group of trade through broker firms followed by broker firms and banks (13.5%) and remaining through banks. iv) 66.7% of the investors in the age group of trade through broker firms followed by banks (14.3%). v) Most of the investors (75.8%) in the age group of trade through broker firms followed by broker firms and banks (15.2%) and remaining through banks. vi) Nearly all the investors in the age group of above 60 trade through broker firms Trading Channel employed in stock trading and Education of the Investors : Data relating to distribution of select retail investors according to the trading channel employed and education are presented in Table 5.2.2

5 TABLE TRADING CHANNEL EMPLOYED IN STOCK TRADING AND Trading Channel Below 10 th Class Broker Firms 3 (33.3) Banks 0 (0.0) Broker Firms 6 and Banks (66.7) Friends/Relatives 0 (0.0) 9 EDUCATION Below Graduation 138 (76.7) 3 (1.7) 27 (15.0) 12 (6.7) 180 Education Graduation 459 (77.3) 27 (4.5) 81 (13.6) 27 (4.5) 594 PG 294 (68.1) 18 (4.2) 84 (19.4) 36 (8.3) 432 Note : Figures in the parenthesis indicate percentages to the column total 894 (73.6) 48 (3.9) 198 (16.3) 75 (6.2) 1215 It can be noted from Table that i) 66.7% of investors who are educated below 10 th class trade through broker firms and banks and the remaining through broker firms. ii) The majority of investors (76.7%) who are educated below graduation trade through broker firms followed by broker firms and banks (15.0%). iii) Most of the graduate investors (77.3%) employed broker firms as their trading channel followed by broker firms and banks (13.6%). iv) A good number of postgraduate investors (68.1%) trade through broker firms followed by broker firms and banks (19.4%).

6 5.2.3 Trading Channel employed in stock trading and Occupation of the Investors : Data relating to distribution of select retail investors according to the trading channel employed and occupation are presented in Table TABLE TRADING CHANNEL EMPLOYED IN STOCK TRADING AND Trading Salaried Channel Emp Broker Firms 585 (73.9) Banks 30 (3.8) Broker Firms 111 and Banks (14.0) Friends/Relatives 66 (8.3) 792 OCCUPATION Occupation Business Professional Retired 171 (82.6) 9 (4.3) 18 (8.7) 9 (4.3) (50.0) 0 (0.0) 45 (50.0) 0 (0.0) (73.8) 9 (7.1) 24 (19.0) 0 (0.0) 126 Note : Figures in the parenthesis indicate percentages to the column total 894 (73.6) 48 (3.9) 198 (16.3) 75 (6.2) 1215 From Table it can be shown that, i) The majority of investors (73.9%) in salaried employees category trade through broker firms followed by broker firms and banks (14.0%).

7 ii) Most of the investors (82.6%) in business category employed broker firms as their trading channel followed by broker firms and banks (8.7%). iii) Half of the investors in the professional occupation category trade through broker firms and remaining through broker firms and banks. iv) A large number of investors (73.8%) in retired category employed broker firms as their trading channel followed by broker firms and banks (19.0%) and the balance through banks Trading Channel employed in stock trading and Income of the Investors : Data relating to distribution of select retail investors according to trading channel employed and income are presented in Table 5.2.4

8 TABLE TRADING CHANNEL EMPLOYED IN STOCK TRADING AND Trading Upto Channel Broker Firms 378 (79.2) Banks 0 (0.0) Broker Firms 54 and Banks (11.3) Friends/Relatives 45 (9.4) 477 INCOME Income (per month) (74.8) (64.4) 21 0 (5.2) (0.0) (14.8) (35.6) 21 0 (5.2) (0.0) Above (63.6) 27 (13.6) 36 (18.2) 9 (4.5) 198 Note : Figures in the parenthesis indicate percentages to the column total 894 (73.6) 48 (3.9) 198 (16.3) 75 (6.2) 1215 From the Table it can be noted that, i) Most of the investors (79.2%) in the income group of below Rs.10,000 employed broker firms as their trading channel followed by broker firms and banks (11.3%) and the balance through friends/relatives. ii) A good number of investors (74.8%) in the income group of Rs.10,000-15,000 trade through broker firms followed by broker firms and banks (14.8%). iii) 64.4% of investors in the income group of Rs.15,001-20,000 trade through broker firms and remaining through broker firms and banks.

9 iv) The majority of investors (63.6%) in the income group of above Rs.20,000 trade through broker firms followed by broker firms and banks (18.2%) Trading Channel employed in stock trading and Gender of the Investors : Data relating to distribution of select retail investors according to trading channel employed and gender are presented in Table TABLE TRADING CHANNEL EMPLOYED IN STOCK TRADING AND GENDER Trading Channel Gender Male Female Broker Firms (75.6) (57.8) Banks 45 3 (4.2) (2.2) Broker Firms and Banks (14.4) (31.1) Friends/Relatives (5.8) (8.9) (73.6) 48 (3.9) 198 (16.3) 75 (6.2) 1215 Note : Figures in the parenthesis indicate percentages to the column total It can be observed from Table that i) The majority of male investors (75.6%) trade through broker firms followed by broker firms and banks (14.4%).

10 ii) A good number of female investors (57.8%) employed broker firms as their trading channel followed by broker firms and banks (31.1%) Trading Channel employed in stock trading and Stage of Life Cycle of the Investors : Data relating to distribution of select retail investors according to trading channel employed and stage of life cycle are presented in Table TABLE TRADING CHANNEL EMPLOYED IN STOCK TRADING AND STAGE OF LIFE CYCLE Trading Channel Unmarried Broker Firms 180 (71.4) Banks 0 (0.0) Broker Firms and 36 Banks (14.3) Friends/Relatives 36 (14.3) 252 Stage Of Life Cycle Married Married having no having children / grownup children below children 6 years (66.1) (90.4) (2.2) (7.9) (24.6) (1.8) 39 0 (7.1) 549 (0.0) 342 Age old 42 (58.3) 9 (12.5) 21 (29.2) 0 (0.0) 72 Note : Figures in the parenthesis indicate percentages to the column total 894 (73.6) 48 (3.9) 198 (16.3) 75 (6.2) 1215 It can be noted from Table that

11 i) A large number of investors (71.4%) who are unmarried employed broker firms as their trading channel followed by broker firms and banks (31.1%). ii) The majority of investors (66.1%) who are married and having no children / having children below 6 years old trade through broker firms followed by broker firms and banks (24.6%). iii) Most of the investors (90.4%) who are married and having grownup children trade through broker firms followed by banks (7.9%). iv) A good number of age old investors (58.3%) trade through broker firms followed by broker firms and banks (29.2%). 5.3 SOURCES OF INFORMATION FOR TAKING INVESTMENT DECISIONS In this section an attempt is made to analyze the equity trading practices of retail investors according to sources of information and age, education, occupation, income, gender and stage of life cycle of the investors Sources of information for taking investment decision and Age Group of the Investors : Data relating to distribution of select retail investors according to sources of information for taking investment decision and age are presented in Table 5.3.1

12 TABLE SOURCES OF INFORMATION ON AND AGE Sources of Age group Information Below Above 60 Personal Study (43.0) (61.4) (38.1) (36.4) (66.7) (50.9) Newspapers (46.5) (71.3) (42.9) (33.3) (58.5) Friends/Relatives (39.5) (28.7) (23.8) (12.1) (12.5) (28.6) Brokers/Investment Advisors 156 (45.6) 207 (40.4) 63 (33.3) 57 (57.6) 27 (37.5) 510 (42.0) Business Channels (35.1) (47.4) (52.4) (42.4) (41.7) (44.0) Investment Websites 189 (55.3) 81 (15.8) 9 (4.8) 9 (9.1) 3 (4.2) 291 (24.0) Sample Note : Figures in the parenthesis indicate percentages to the total sample It can be observed from Table that, i) The majority of investors (58.5%) gather information for taking investment decisions from newspapers followed by personal analysis (50.9%). ii) A good number of investors (55.3%) in the age group of below 30 years gather information from investment websites followed by news papers (46.5%). iii) The majority of investors (71.3%) in the age group of years collect information from newspapers for taking investment decisions followed by personal analysis (61.4%).

13 iv) A good number of investors (52.4%) in the age group of gather information from business channels followed by newspapers (42.9%). v) Most of the investors (57.6%) in the age group of collect information from brokers/investment advisors followed by business channels (42.4%). vi) All the investors in the age group of above 60 years based their investment decisions on information from newspapers followed by personal analysis (66.7%) Sources of information for taking investment decision and Education of the Investors : Data relating to distribution of select retail investors according to sources of information for taking investment decision and education are presented in Table 5.3.2

14 TABLE DISTRIBUTION ION OF SELECT SAMPLE INVESTORS ACCORDING TO SOURCES OF INFORMATION ON AND EDUCATION Education Sources of Below Below Information Graduation PG 10th Class Graduation Personal Study (48.3) (43.9) (60.4) (50.9) Newspapers (66.7) (56.7) (60.6) (56.3) (58.5) Friends/Relatives 3 (33.3) 66 (36.7) 126 (21.2) 153 (35.4) 348 (28.6) Brokers/Investment Advisors 3 (33.3) 63 (35.0) 207 (34.8) 237 (54.9) 510 (42.0) Business Channels (66.7) (48.3) (39.4) (47.9) (44.0) Investment Websites 9 30 (16.7) 81 (13.6) 171 (39.6) 291 (24.0) Sample Note : Figures in the parenthesis indicate percentages to the total sample From Table it can be shown that, i) All the investors who are educated below 10 th Class based their investment decisions on personal study and on investment websites followed by news papers and business channels (66.7%) ii) The majority of investors (56.7%) who are educated below graduation gather information from newspapers for taking investment decisions followed by business channels and personal study (48.3%). iii) Most of the graduate investors (60.6%) collect information from newspapers for taking investment decisions followed by personal analysis (43.9%).

15 iv) A good number of postgraduate investors (60.4%) base their investment decisions on personal study followed by information gathered from newspapers (56.3%) Sources of information for taking investment decision and Occupation of the Investors : Data relating to distribution of select retail investors according to sources of information for taking investment decision and occupation are presented in Table TABLE SOURCES OF INFORMATION ON AND OCCUPATION Occupation Sources of Salaried Information Business Professional Retired Emp Personal Study (50.4) (47.8) (50.0) (59.5) (50.9) Newspapers (62.5) (47.8) (30.0) (71.4) (58.5) Friends/Relatives 294 (37.1) 18 (8.7) 18 (20.0) 18 (14.3) 348 (28.6) Brokers/Investment Advisors 318 (40.2) 81 (39.1) 54 (60.0) 57 (45.2) 510 (42.0) Business Channels (46.6) (43.5) (20.0) (45.2) (44.0) Investment Websites 207 (26.1) 27 (13.0) 45 (50.0) 12 (9.5) 291 (24.0) sample Note : Figures in the parenthesis indicate percentages to the total sample

16 It can be observed from Table that i) Most of the investors (62.5%) in the salaried employees category gather information from newspapers for taking investment decision followed by personal analysis (50.4%). ii) Around 48.0% of the investors in the business category base their investment decision on personal study and information collected from newspapers followed by business channels (43.5%). iii) The majority of investors (60.0%) in the professional occupation category base their investment decisions on broker/financial advisor s advice and half of the investors base their decisions on personal study and information collected from investment websites. iv) A large number of investors (71.4%) collect information from newspapers for taking investment decision followed by personal analysis (59.5%) Sources of information for taking investment decision and Income of the Investors : Data relating to distribution of select retail investors according to sources of information for taking investment decision and occupation are presented in Table 5.3.4

17 TABLE SOURCES OF INFORMATION ON AND INCOME Income Sources of Upto Above Information Personal Study (45.3) (52.6) (73.3) (45.5) (50.9) Newspapers (59.7) (57.0) (57.8) (59.1) (58.5) Friends/Relatives 75 (15.7) 180 (44.4) 39 (28.9) 54 (27.3) 348 (28.6) Brokers/Investment Advisors 177 (37.1) 183 (45.2) 33 (24.4) 117 (59.1) 510 (42.0) Business Channels (23.9) (52.6) (46.7) (72.7) (44.0) Investment Websites 99 (20.8) 84 (20.7) 45 (33.3) 63 (31.8) 291 (24.0) Sample Note : Figures in the parenthesis indicate percentages to the total sample It can be noted from Table that, i) Most of the investors (59.8%) in the income group of below Rs. 10,000 gather information from newspapers for taking investment decisions followed by personal analysis (45.3%). ii) The majority of investors (57.0%) in the income group of Rs.10,000-15,000 base their decision on information gathered from newspapers followed by personal analysis and business channels (52.6%). iii) A large number of investors (73.3%) in the income group of Rs.15,001-20,000 take investment decisions based on personal study followed by information gathered from news papers (57.8%).

18 iv) Most of the investors (72.7%) base their decisions on information collected from business channels followed by broker/investment advisor s advice and newspapers (59.1%) Sources of information for taking investment decision and Gender of the Investors : Data relating to distribution of select retail investors according to sources of information for taking investment decision and gender are presented in Table TABLE SOURCES OF INFORMATION ON AND GENDER Sources of Information Gender Male Female Personal Study (48.6) (68.9) (50.9) Newspapers (56.9) (71.1) (58.5) Friends/Relatives 276 (25.6) 72 (53.3) 348 (28.6) Brokers/Investment Advisors 459 (42.5) 51 (37.8) 510 (42.0) Business Channels (42.5) (55.6) (44.0) Investment Websites (22.8) (33.3) (24.0) Sample Note : Figures in the parenthesis indicate percentages to the total sample

19 It can be observed from Table that, i) The majority of male investors (56.9%) gather information from newspapers for taking investment decisions followed by personal analysis (48.6%). ii) Most of the female investors (71.1%) base their investment decision on information collected from newspapers followed by personal analysis (68.9%). iii) More than half of the female investors take their investment decision based on friends/relatives advise Sources of information for taking investment decision and Stage of Life Cycle of the Investors : Data relating to distribution of select retail investors according to sources of information for taking investment decision and stage of life cycle are presented in Table 5.3.6

20 TABLE SOURCES OF INFORMATION ON AND STAGE OF LIFE CYCLE Sources of Information Unmarried Stage Of Life Cycle Married Married having no having children / grownup children children below 6 years (48.1) (47.4) (66.1) (54.4) (36.6) (21.9) (38.3) (40.4) (46.4) (46.5) (31.1) (7.9) Age old Personal Study (64.3) (41.7) (50.9) Newspapers (42.9) (75.0) (58.5) Friends/Relatives (25.0) (12.5) (28.6) Brokers/Investment Advisors (53.6) (37.5) (42.0) Business Channels (35.7) (41.7) (44.0) Investment Websites (35.7) (4.2) (24.0) Sample Note : Figures in the parenthesis indicate percentages to the total sample It can be shown from Table that, i) The majority of investors (64.3%) who are unmarried base their investment decisions on personal study followed by broker/investment advisor s advice (53.6%). ii) A good number of investors (66.1%) who are married and having no children/ having children below 6 years old gather information from newspapers for taking investment decision followed by personal study (48.1%).

21 iii) Most of the investors (54.4%) who are married and having grownup children base their investment decisions on information collected from newspapers followed by personal study (47.4%). iv) 75.0% of the age old investors gather information from newspapers for taking investment decisions followed by business channels and personal study (41.7%). 5.4 FACTORS INFLUENCING ING PURCHASE OF SHARES In this section an attempt is made to analyze the equity trading practices of retail investors according to factors influencing purchase of shares and age, education, occupation, income, gender and stage of life cycle of the investors Factors Influencing Purchase of Shares and age group of the Investors : Data relating to distribution of select retail investors according to factors influencing purchase of shares and age are presented in Table 5.4.1

22 TABLE FACTORS INFLUENCING NG PURCHASE OF SHARES S AND AGE Influencing Factors Experts Recommendation To average the purchase price Bullish Market Conditions Worthiness of Scrip Below (30.7) 42 (12.3) 144 (42.1) 75 (21.9) Age group (35.7) 126 (24.6) 171 (33.3) 183 (35.7) 54 (28.6) 45 (23.8) 27 (14.3) 99 (52.4) 51 (51.5) 0 (0.0) 30 (30.3) 45 (45.5) Above (50.0) 0 (0.0) 12 (16.7) 36 (50.0) 429 (35.3) 213 (17.5) 384 (31.6) 438 (36.0) Sample Note : Figures in the parenthesis indicate percentages to the total sample It can be noted from Table that, i) The majority of the investors (36.0%) purchase the scrip based on its worthiness followed by shares recommended by experts (35.3%). ii) A good number of investors (42.1%) in the age group of below 30 purchase shares when bullish conditions prevail in the market followed by shares recommended of the experts (30.7%). iii) Most of the investors (35.7%) in the age group of purchase shares based on experts recommendation and worthiness of scrip. iv) A large number of investors (52.4%) in the age group of purchase shares based on their worthiness followed by shares recommended by experts (28.6%).

23 v) Nearly half of the investors in the age group of purchase shares recommended by experts followed by worthy scrips (45.5%). vi) Half of the investors in the age group of above 60 years purchase shares based on experts recommendation and worthiness of scrip Factors Influencing Purchase of Shares and Education of the Investors : Data relating to distribution of select retail investors according to factors influencing purchase of shares and education are presented in Table TABLE FACTORS INFLUENCING ING PURCHASE OF SHARES AND Influencing Factors Below 10th Class 6 (66.7) 0 (0.0) 3 (33.3) 9 EDUCATION Education Below Graduation Graduation PG Experts Recommendation 63 (35.0) 171 (28.8) 189 (43.8) 429 (35.3) To average the purchase price (28.3) (21.2) (8.3) (17.5) Bullish Market Conditions (23.3) (31.8) (34.7) (31.6) Worthiness of Scrip (36.7) (36.4) (34.0) (36.0) Sample Note : Figures in the parenthesis indicate percentages to the total sample

24 It can be observed from Table that, i) All the investors who are educated below 10 th class purchase shares based on their worthiness followed by shares recommended by experts (66.7%). ii) A good number of investors (36.7%) who are educated below graduation purchase shares based on their worthiness followed by shares recommended by experts (35.0%). iii) The majority of graduate investors (36.4%) based on their worthiness and 31.8% purchase shares when bullish conditions prevail in the market. iv) Most of the postgraduate investors (43.8%) purchase shares based on experts recommendation followed by bullish market conditions (34.7%) Factors Influencing Purchase of Shares and Occupation of the Investors : Data relating to distribution of select retail investors according to factors influencing purchase of shares and occupation are presented in Table 5.4.3

25 TABLE FACTORS INFLUENCING PURCHASE OF SHARES AND A OCCUPATION Occupation Influencing Salaried Factors Business Professional Retired Emp Experts Recommendation 294 (37.1) 54 (26.1) 18 (20.0) 63 (50.0) 429 (35.3) To average the purchase price 195 (24.6) 9 (4.3) 9 (10.0) 0 (0.0) 213 (17.5) Bullish Market Conditions 231 (29.2) 90 (43.5) 27 (30.0) 36 (28.6) 384 (31.6) Worthiness of Scrip 282 (35.6) 63 (30.4) 36 (40.0) 57 (45.2) 438 (36.0) Sample Note : Figures in the parenthesis indicate percentages to the total sample From Table it can be shown that, i) A good number of investors (37.1%) in the salaried employees category purchase shares recommended by the experts followed by worthiness of scrip (35.6%). ii) Most of the investors (43.5%) in the business category purchase shares when bullish conditions prevail in the market followed by worthiness of scrip (30.4%). iii) The majority of investors (40.0%) in the professional occupation category purchase shared based on their worthiness followed by 30.0% who purchase shares when bullish conditions prevail in the market.

26 iv) Half of the investors in the retired category purchase shares recommended by the experts followed by worthy shares (45.2%) Factors Influencing Purchase of Shares and Income of the Investors: Data relating to distribution of select retail investors according to factors influencing purchase of shares and income are presented in Table TABLE FACTORS INFLUENCING PURCHASE OF SHARES AND A INCOME Income Influencing Factors Upto Above Experts Recommendation 150 (31.4) 159 (39.3) 30 (22.2) 90 (45.5) 429 (35.3) To average the purchase price 54 (11.3) 87 (21.5) 54 (40.0) 18 (9.1) 213 (17.5) Bullish Market Conditions 171 (35.8) 120 (29.6) 39 (28.9) 54 (27.3) 384 (31.6) Worthiness of Scrip 138 (28.9) 147 (36.3) 63 (46.7) 90 (45.5) 438 (36.0) Sample Note : Figures in the parenthesis indicate percentages to the total sample It can be noted from Table that, i) A good number of investors (35.8%) in the income group of below Rs.10,000 purchase shares when bullish conditions prevail in the market followed by shares recommended by experts (31.4%).

27 ii) The majority of investors (39.3%) in the income group of below Rs.10,000 15,000 purchase shares recommended by experts followed by worthy shares (36.3%). iii) Most of the investors (46.7%) in the income group of below Rs.15,001-20,000 purchase shares based on its worthiness followed by 40.0% who purchase to average purchase price. vii) 45.5% of the investors in the income group of above Rs.20,000 purchase shares based on experts recommendation and worthiness of scrip Factors Influencing Purchase of Shares and Gender of the Investors: Data relating to distribution of select retail investors according to factors influencing purchase of shares and gender are presented in Table TABLE FACTORS INFLUENCING PURCHASE OF SHARES AND A GENDER Influencing Factors Gender Male Female Experts Recommendation 351 (32.5) 78 (57.8) 429 (35.3) To average the purchase price 180 (16.7) 33 (24.4) 213 (17.5) Bullish Market Conditions 333 (30.8) 51 (37.8) 384 (31.6) Worthiness of Scrip 414 (38.3) 24 (17.8) 438 (36.0) Sample Note : Figures in the parenthesis indicate percentages to the total sample

28 It can be observed from Table that, i) Most of the male investors (38.3%) purchase shares on its worthiness followed by recommendations of experts (32.5%). ii) The majority of female investors (57.8%) purchase shares recommended by experts and 37.8% purchases when bullish sentiment prevail in the market Factors Influencing Purchase of Shares and Stage of Life Cycle of the Investors : Data relating to distribution of select retail investors according to factors influencing purchase of shares and stage of life cycle are presented in Table 5.4.6

29 TABLE FACTORS INFLUENCING PURCHASE OF SHARES S AND STAGE OF nfluencing Factors Unmarried LIFE CYCLE Stage of Life Cycle Married having no Married children / having children grownup below 6 children years (34.4) (38.6) (27.3) (13.2) (27.9) (32.5) Age old Experts Recommendation 72 (28.6) 36 (50.0) 429 (35.3) To average the purchase price (7.1) (0.0) (17.5) Bullish Market Conditions (39.3) (29.2) (31.6) Worthiness of Scrip (32.1) (37.2) (39.5) (25.0) (36.0) Note : Figures in the parenthesis indicate percentages to the total sample From the Table it can be noted that, i) Most of the investors (39.3%) who are unmarried purchase shares when bullish conditions prevail in the market followed by 32.1% who purchase shares based on its worthiness. ii) A good number of investors (37.2%) who are married and having no children / children below 6 years purchase shares which are worthy followed by 34.4% who purchase shares recommended by experts.

30 iii) The majority of investors (39.5%) who are married and having grown up children purchase shares which are worthy followed by shares recommended by experts (38.6%). iv) Half of the age old investors purchases shares recommended by experts followed by 29.2% who purchase shares when bullish conditions prevail in the market. 5.5 FACTORS INFLUENCING ING SALE OF SHARES In this section an attempt is made to analyze the equity trading practices of retail investors according to factors influencing sale of shares and age, education, occupation, income, gender and stage of life cycle of the investors Factors Influencing Sale of Shares and Age Group of the Investors : Data relating to distribution of select retail investors according to factors influencing sale of shares and age are presented in Table 5.5.1

31 TABLE FACTORS INFLUENCING SALE OF SHARES AND AGE A Influencing Age group Factors Below Above 60 Need of Money 45 (13.2) 63 (12.3) 36 (19.0) 36 (36.4) 12 (16.7) 192 (15.8) After getting desired Rate of Return 168 (49.1) 294 (57.3) 108 (57.1) 48 (48.5) 33 (45.8) 651 (53.6) Market touches new high 90 (26.3) 153 (29.8) 36 (19.0) 18 (18.2) 27 (37.5) 324 (26.7) Market expected to fall 84 (24.6) 114 (22.2) 45 (23.8) 12 (12.1) 0 (0.0) 255 (21.0) Sample Note : Figures in the parenthesis indicate percentages to the total sample From Table it can be observed that, i) The majority of investors (53.6%) sell the shares after getting desired rate of return and around 27% sell the shares when the market touches new high. ii) Nearly 50% of the investors in the age group of below 30 sell the shares after getting desired rate of return followed by 26.3% who sell the shares when market touches new high. iii) The majority of investors (57.3%) in the age group of sell the shares after getting desired rate of return followed by 29.8% who sell the shares when market touches new high.

32 iv) Most of the investors (57.1%) in the age group of sell the shares after getting desired rate of return followed by 23.8% who sell the shares when the market is expected to fall. v) Nearly half of the investors in the age group of sell the shares after getting desired rate of return followed by 36.4% who sell the shares when they are in need of money. vi) A good number of investors (45.8%) in the age group of above 60 sell the shares after getting desired rate of return followed by 37.5% who sell the shares when market touches new high Factors Influencing Sale of Shares and Education of the Investors : Data relating to distribution of select retail investors according to factors influencing sale of shares and education are presented in Table 5.5.2

33 TABLE FACTORS INFLUENCING SALE OF SHARES AND EDUCATION E Influencing Factors Below 10th Class 9 Education Below Graduation Graduation PG Need of Money 18 (10.0) 72 (12.1) 93 (21.5) 192 (15.8) After getting desired Rate (33.3) (65.0) (48.5) (56.3) (53.6) of Return Market touches new high (0.0) (25.0) (28.8) (25.0) (26.7) Market expected to fall (33.3) (25.0) (16.7) (25.0) (21.0) Sample Note : Figures in the parenthesis indicate percentages to the total sample It can be shown from Table that, i) All the investors who are educated below 10 th Class sell the shares when they are in need of money. ii) The majority of investors (65.0%) who are educated below graduation sell the shares after getting desired rate of return followed by 25.0% who sell the shares when the market touches new high or when expected to fall. iii) 48.5% of graduate investors sell the shares after getting desired rate of return followed by 28.8% who sell the shares when the market touches new high.

34 iv) A good number of postgraduate investors (56.3%) sell the shares after getting desired rate of return followed by 25.0% who sell the shares when the market touches new high or when expected to fall Factors Influencing Sale of Shares and Occupation of the Investors : Data relating to distribution of select retail investors according to factors influencing sale of shares and occupation are presented in Table TABLE FACTORS INFLUENCING SALE OF SHARES AND OCCUPATION Influencing Factors Need of Money After getting desired Rate of Return Market touches new high Market Salaried Emp 132 (16.7) 402 (50.8) Occupation Business Professional 36 (17.4) 126 (60.9) 0 (0.0) 72 (80.0) Retired 24 (19.0) 51 (40.5) 192 (15.8) 651 (53.6) 225 (28.4) 36 (17.4) 0 (0.0) 63 (50.0) 324 (26.7) expected to fall (27.7) (8.7) (20.0) (0.0) (21.0) Sample Note : Figures in the parenthesis indicate percentages to the total sample From the Table it can be noted that, i) The majority of investors (50.8%) in the salaried employees category sell the shares after getting desired rate of return followed by 28.4% who sell the shares when the market touches new high.

35 ii) Most of the investors (60.9%) who are in business category sell the shares after getting desired rate of return followed by 17.4% who sell the shares when they are in need of money or when the market touches new high. iii) A large number of investors (80.0%) in the professional occupation category sell the shares after getting desired rate of return and the remaining sell the shares when the market is expected to fall. iv) Half of the investors in the retired category sell the shares when market touches new high followed by 40.5% who sell the shares after getting desired rate of return Factors Influencing Sale of Shares and Income of the Investors: Data relating to distribution of select retail investors according to factors influencing sale of shares and income are presented in Table 5.5.4

36 TABLE FACTORS INFLUENCING SALE OF SHARES AND INCOME I Income ( per month) Influencing Upto Above Factors Need of Money 75 (15.7) 39 (9.6) 33 (24.4) 45 (22.7) 192 (15.8) After getting desired Rate (44.0) (63.0) (64.4) (50.0) (53.6) of Return Market touches new high 135 (28.3) 117 (28.9) 18 (13.3) 54 (27.3) 324 (26.7) Market expected to fall 84 (17.6) 120 (29.6) 33 (24.4) 18 (9.1) 255 (21.0) Sample Note : Figures in the parenthesis indicate percentages to the total sample It can be observed from Table that, i) A large number of investors (44.0%) in the income group of below Rs.10,000 sell the shares after getting desired rate of return followed by 28.3% who sell the shares when the market of expected to fall. ii) Most of the investors (63.0%) in the income group of Rs.10,000-15,000 sell the shares after getting desired rate of return followed by 29.6% who sell the shares when the market of expected to fall. iii) The majority of investors (64.4%) in the income group of Rs.15,001-20,000 sell the shares after getting desired rate of return followed

37 by 24.4% who sell the shares when they are in need of money or when the market is expected to fall. iv) Half of the investors in the income group of above Rs.20,000 sell the shares after getting desired rate of return followed by 27.3% who sell the shares when the market touches new high Factors Influencing Sale of Shares and Gender of the Investors: Data relating to distribution of select retail investors according to factors influencing sale of shares and gender are presented in Table TABLE FACTORS INFLUENCING SALE OF SHARES AND GENDER Influencing Factors Gender Male Female Need of Money (16.7) (8.9) (15.8) After getting desired Rate of Return 555 (51.4) 96 (71.1) 651 (53.6) Market touches new high (25.0) (40.0) (26.7) Market expected to fall (22.5) (8.9) (21.0) Sample Note : Figures in the parenthesis indicate percentages to the total sample It can be noted from Table that, i) Most of the male investors (51.4%) sell the shares after getting desired rate of return followed by 25.0% who sell the shares when market touches new high.

38 ii) The majority of female investors (71.1%) sell the shares after getting desired rate of return followed by 40.0% who sell the shares when market touches new high Factors Influencing Sale of Shares and Stage of Life Cycle of the Investors : Data relating to distribution of select retail investors according to factors influencing sale of shares and stage of life cycle are presented in Table TABLE FACTORS INFLUENCING SALE OF SHARES AND STAGE S OF LIFE Influencing Factors Need of Money After getting desired Rate of Return Market touches new high Market expected to fall Unmarried 27 (10.7) 144 (57.1) CYCLE CLE Stage Of Life Cycle Married having no children / children below 6 years 90 (16.4) 309 (56.3) Married having grownup children 63 (18.4) 165 (48.2) Age old 12 (16.7) 33 (45.8) 192 (15.8) 651 (53.6) 36 (14.3) 189 (34.4) 72 (21.1) 27 (37.5) 324 (26.7) (32.1) (18.0) (21.9) (0.0) (21.0) Sample Note : Figures in the parenthesis indicate percentages to the total sample

39 From Table it can be shown that, i) The majority of investors (57.1%) who are unmarried sell the shares after getting desired rate of return followed by 32.1% who sell the shares when the market is expected to fall. ii) A good number of investors (56.3%) who are married and having no children/having children below 6 years old sell the shares after getting desired rate of return followed by 34.4% who sell the shares when the market touches new high. iii) Most of the investors (48.2%) who are married and having grownup children sell the shares after getting desired rate of return followed by followed by 21.9% who sell the shares when the market is expected to fall. iv) 45.8% of the age old investors sell the shares after getting desired rate of return followed by followed by 37.5% who sell the shares when the market touches new high. 5.6 FREQUENCY OF PORTFOLIO VALUATION In this section an attempt is made to analyze the equity trading practices of retail investors according to factors frequency of portfolio valuation and age, education, occupation, income, gender and stage of life cycle of the investors.

40 5.6.1 Frequency of Portfolio valuation and Age Group of the Investors: Data relating to distribution of select retail investors according to frequency of portfolio valuation and age are presented in Table TABLE Frequency Daily Weekly Monthly FREQUENCY OF PORTFOLIO VALUATION AND AGE Age group Below Above (35.1) (49.7) (57.1) (45.5) (16.7) (43.9) (25.7) (14.3) (9.1) (25.0) (21.1) (24.6) (28.6) (45.5) (58.3) Note : Figures in the parenthesis indicate percentages to the column total It can be shown from Table that, 540 (44.4) 336 (27.7) 339 (27.9) 1215 i) Most of the investors (44.4%) assess the value of their portfolio daily followed by 27.9% who access the value on monthly basis. ii) The majority of investors (43.9%) in the age group of below 30 assess their portfolio value weekly followed by daily (35.1%). iii) Almost half of the investors in the age group of measure the value of their portfolio daily followed by weekly (25.7%). iv) A large number of investors (57.1%) in the age group of assess the portfolio value daily followed by monthly (28.6%).

41 v) An equal proportion of investors (45.5%) in the age group of measure the value of their portfolio daily / monthly. vi) The majority of investors (58.3%) in the age group of above 60 years assess the value of their portfolio monthly followed by weekly (25.0%) Frequency of Portfolio valuation and Education of the Investors: Data relating to distribution of select retail investors according to frequency of portfolio valuation and education are presented in Table TABLE FREQUENCY OF PORTFOLIO VALUATION AND EDUCATION Frequency Daily Weekly Monthly Below 10th Class 9 0 (0.0) 0 (0.0) 9 Below Graduation 69 (38.3) 60 (33.3) 51 (28.3) 180 Education Graduation 270 (45.5) 144 (24.2) 180 (30.3) 594 PG 192 (44.4) 132 (30.6) 108 (25.0) 432 Note : Figures in the parenthesis indicate percentages to the column total It can be noted from Table that 540 (44.4) 336 (27.7) 339 (27.9) 1215 i) All the investors who are educated below 10th Class assess the value of their portfolio daily.

42 ii) A good number of investors who are educated below graduation (38.3%) measure the portfolio value daily followed by weekly (33.3%). iii) The majority of graduate investors (45.5%) compute the value of their portfolio daily followed by monthly (30.3%). iv) Most of the postgraduate investors (44.4%) assess the portfolio value daily followed by weekly (30.6%) Frequency of Portfolio valuation and Occupation of the Investors : Data relating to distribution of select retail investors according to frequency of portfolio valuation and occupation are presented in Table TABLE FREQUENCY OF PORTFOLIO VALUATION AND OCCUPATION Occupation Frequency Salaried Business Professional Retired Emp Daily (47.0) (52.2) (10.0) (40.5) (44.4) Weekly (28.0) (17.4) (60.0) (19.0) (27.7) Monthly (25.0) (30.4) (30.0) (40.5) (27.9) Note : Figures in the parenthesis indicate percentages to the column total It can be observed from Table that

43 i) The majority of investors in salaried employees category (47.0%) measure the value of their portfolio daily followed by weekly (28.0%). ii) 52.2% of investors in business category assess the value of their portfolio daily followed by monthly (30.4%). iii) Most of the investors (60.0%) in professional occupation category compute the portfolio value weekly followed by monthly (30.0%). iv) An equal proportion of investors (40.5%) in retired category measure the value of their portfolio daily / weekly Frequency of Portfolio valuation and Income of the Investors : Data relating to distribution of select retail investors according to frequency of portfolio valuation and income are presented in Table TABLE FREQUENCY OF PORTFOLIO VALUATION AND INCOME Frequency Daily Weekly Monthly Upto (44.0) 177 (37.1) 90 (18.9) 477 Income (per month) (39.3) (46.7) (17.0) (33.3) (43.7) (20.0) Above (54.6) 45 (22.7) 45 (22.7) (44.4) 336 (27.7) 339 (27.9) 1215 Note : Figures in the parenthesis indicate percentages to the column total

44 From Table it can be shown that, i) A good number of investors (44.0%) in the income group of below Rs.10,000 measure the value of their portfolio daily followed by weekly (37.1%). ii) The majority of investors (43.7%) in the income group of Rs.10,000-15,000 compute the value of their portfolio monthly followed by daily (39.3%). iii) 46.7% of investors in the income group of Rs.15,001-20,000 assess the value of their portfolio daily followed by weekly (33.3%). iv) Most of the investors (54.6%) in the income group of above Rs.20,000 compute the portfolio value daily and the remaining by weekly/monthly (22.7%) Frequency of Portfolio valuation and Gender of the Investors : Data relating to distribution of select retail investors according to frequency of portfolio valuation and gender are presented in Table 5.6.5

45 TABLE FREQUENCY OF PORTFOLIO VALUATION AND GENDE DER Frequency Gender Male Female Daily (47.8) (17.8) (44.4) Weekly (23.3) (62.2) (27.7) Monthly (28.9) (20.0) (27.9) Note : Figures in the parenthesis indicate percentages to the column total From Table it can be noted that, i) The majority of the male investors (47.8%) evaluate the value of their portfolio daily followed by monthly (28.9%). ii) Most of the female investors (62.2%) assess value of their portfolio weekly followed by monthly (20.0%) Frequency of Portfolio valuation and Stage of Life Cycle of the Investors : Data relating to distribution of select retail investors according to frequency of portfolio valuation and stage of life cycle are presented in Table 5.6.6

46 TABLE FREQUENCY OF PORTFOLIO VALUATION AND STAGE OF LIFE Frequency Daily Weekly Monthly Unmarried 90 (35.7) 99 (39.3) 63 (25.0) 252 CYCLE Stage Of Life Cycle Married having no children / children below 6 years 231 (42.1) 183 (33.3) 135 (24.6) 549 Married having grownup children 189 (55.3) 36 (10.5) 117 (34.2) 342 Age old 30 (41.7) 18 (25.0) 24 (33.3) 72 Note : Figures in the parenthesis indicate percentages to the column total From Table it can be observed that, 540 (44.4) 336 (27.7) 339 (27.9) 1215 i) A good number of investors (39.3%) who are unmarried evaluate their portfolio value weekly followed by daily (35.7%). ii) Most of the investors (42.1%) who are married and having no children / having children below 6 years assess the value of their portfolio daily followed by weekly (33.3%). iii) The majority of investors (55.3%) who are married and having grownup children measure the value of their portfolio daily followed by monthly (34.2%). iv) Most of the age old investors (41.7%) compute their portfolio value daily followed by monthly (33.3%).

47 5.7 INVESTMENT TIME FRAME IN EQUITY SHARES In this section an attempt is made to analyze the equity trading practices of retail investors according to investment time frame in equity shares and age, education, occupation, income, gender and stage of life cycle of the investors Investment Time Frame in Equity Shares and age group of the Investors : Data relating to distribution of select retail investors according to investment time frame in equity shares and age are presented in Table TABLE INVESTMENT TIME FRAME IN EQUITY SHARES AND AGE Time Frame Below Age group Above 60 Less than month (19.3) (27.5) (20.7) (36.4) (37.5) 1 to months (23.7) (31.0) (19.0) (27.3) (16.7) 3 to Months (18.4) (15.2) (19.0) (18.2) (8.3) 7 to months (16.7) (19.3) (22.3) (0.0) (12.5) More than Months (21.9) (7.0) (19.0) (18.2) (25.0) Note : Figures in the parenthesis indicate percentages to the column total 309 (25.4) 315 (25.9) 201 (16.6) 207 (17.0) 183 (15.1) 1215 (100.00)

48 It can be observed from Table i) More than half of the investors (51.3%) hold the shares for less than 2 months. Only 15.1% hold the shares for more than 12 months. ii) A good number of investors (43.0%) in the age group of below 30 years hold the shares for less than 2 months followed by more than 12 months (21.9%). iii) Most of the investors (58.5%) in the age group of hold the shares for less than 2 months followed by 3-6 months (27.5%). iv) A good number of investors (39.7%) in the age group of hold the shares for less than two months followed by 7-12 months (22.3%). v) Most of the investors (63.7%) in the age group of hold the shares for less than two months followed by more than 12 months / 3-6 months (18.2%). vi) The majority of investors (54.2%) in the age group of above 60 hold the shares for less than 2 months followed by more than 12 months (25.0%).

49 5.7.2 Investment ent Time Frame in Equity Shares and Education of the Investors : Data relating to distribution of select retail investors according to investment time frame in equity shares and education are presented in Table TABLE INVESTMENT TIME FRAME IN EQUITY SHARES AND A EDUCATION Education Time Below Below Frame Graduation PG 10th Class Graduation Less than 1 month 9 24 (13.3) 147 (24.7) 129 (29.9) 309 (25.4) 1 to 2 months 0 (0.0) 81 (45.0) 153 (25.8) 81 (18.8) 315 (25.9) 3 to 6 Months 0 (0.0) 24 (13.3) 108 (18.2) 69 (16.0) 201 (16.6) 7 to 12 months 0 (0.0) 21 (11.7) 123 (20.7) 63 (14.6) 207 (17.0) More than 12 Months 0 (0.0) 30 (16.7) 63 (10.6) 90 (20.8) 183 (15.1) (100.00) Note : Figures in the parenthesis indicate percentages to the column total It can be noted from Table that, i) All the investors who are educated below 10th Class hold the shares for less than one month. ii) The majority of investors (58.33%) who are educated below graduation hold the shares for less than two months followed by more than 12 months (16.7%).

50 iii) Around 50% of the graduate investors hold the shares for less than 2 months followed by 7-12 months (20.7%). iv) Most of the investors (48.7%) hold the shares for less than two months followed by more than 12 months (20.8%) Investment Time Frame in Equity Shares and Occupation of the Investors : Data relating to distribution of select retail investors according to investment time frame in equity shares and occupation are presented in Table TABLE INVESTMENT TIME FRAME IN EQUITY SHARES AND A Time Salaried Frame Emp Less than month (21.6) 1 to months (26.9) 3 to Months (17.0) 7 to months (22.0) More than Months (12.5) 792 OCCUPATION Occupation Business Professional Retired 81 (39.1) 54 (26.1) 36 (17.4) 15 (7.2) 21 (10.1) (0.0) 27 (30.0) 9 (10.0) 9 (10.0) 45 (50.0) (45.2) 21 (16.7) 21 (16.7) 9 (7.1) 18 (14.3) 126 Note : Figures in the parenthesis indicate percentages to the column total 309 (25.4) 315 (25.9) 201 (16.6) 207 (17.0) 183 (15.1) 1215 (100.00)

51 It can be observed from Table that i) A good number of investors (48.5%) who are in salaried employees category hold the shares for less than 2 months followed by 7-12 months (22.0%). ii) The majority of investors (65.2%) in the business category hold the shares for less than 2 months followed by more than 12 months (10.1%). iii) Half of the investors in the professional occupation category hold the shares for more than 12 months followed by 7-12 and 1-2 months (30.0% each). iv) Most of the investors (61.9%) hold the shares for less than 2 months followed by 3-6 months (16.7%) Investment Time Frame in Equity Shares and Income of the Investors : Data relating to distribution of select retail investors according to investment time frame in equity shares and income are presented in Table 5.7.4