Investors' Perceptions of Post-Investment Behavior in Securities Markets

CHAPTER –FIVE
PERCEPTION OF INVESTORS ON POST- INVESTMENT

BEHAVIOUR IN SECURITIES MARKET
5.1 INTRODUCTION
When the investors are investing in the Securities market it is said that,
they are emotional rather than rational in most of the occasions. The dynamics of
the investment process, culture, and investment analysis can significantly
improve the decision-making process, resulting in better investment performance
and satisfaction. To gauge the impact of the change and growth of the
investments of individual investor, it is essential to analyze the quality of its
growth, investment pattern and the post investor’s behavior. The chapter is
structured in such a way to study the perception towards post-investment
behaviour by analyzing the factors influencing the investment decision in
portfolio construction the relationship between demographic profile and
investment profile of the investors and the factors influencing investment
decision, investors reaction towards capital market information, investors’
perception on services of brokers and investors attitude towards profit booking
and change in life style so as to find whether the respondents are successful
investors.
5.2 FACTORS INFLUENCING PORTFOLIO CONSTRUCTION
As Securities market is a nonstop national video game wherein every

minute counts and the investment decision making process is a multi-faceted
process subject to change over a period of time. In the present chapter an attempt
has been made to identify the perceptual factors which influence the investors to
invest in securities market. There are a number of investment opportunities
available to an investor. Each of these investments has its own risk and return
features. The proverb “never put the eggs in the same basket” guides the investor
to diversify the risk. Diversification refers to the process whereby an investor
invests his funds in more than one investment opportunity. Investors in the stock
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market want to explore the art of stock picking and selecting, based on a certain
set of criteria, with the aim of achieving a rate of return that is greater than the
market’s over the return. In this process they perceive certain factors having
impact on the stock market performance. These factors may be company related,
industry specific or economy oriented. With the increased awareness of
investors, the macroeconomic factors are watched carefully today for assessing
the stock market performance. An investor must learn to analyze and measure
the risk and return of the portfolio. The investors may not be in a position to
undertake fundamental and technical analysis before they decide about their
investment options.
The study tried to explore various statements that have been mainly
concentrated by the investors while bucketing the stocks or in other words
portfolio construction. For the purpose, 23 factors were identified and sought on
a five point Likert Scale (Strongly Agree, Agree, Neutral, Disagree, and highly
disagree). For the purpose of analysis, each item is related on a one-to-five
response scale where, the response values tweeted are strongly agree = 5;
Agree = 4; Neutral = 3; Disagree = 2 and highly disagree = 1. The mean and
standard deviation of each parameter is shown in Table 5.1.
TABLE 5.1
Factors Influencing Portfolio Construction
S.No Statements Mean S.D
1. Geographical Location of the company 3.17 1.431
2. Size of the company 3.99 1.111
3. Brand Name 3.68 1.209

4. Ownership 3.73 1.266
5. Turnover ratio 3.58 1.382
6. Industrial Growth rate 3.74 1.311
7. Quarterly results 3.86 1.235
8. Market share value-high 3.44 1.285
9. Satisfactory Dividend 3.53 1.377

10. Recommendation of Analyst 3.83 1.212
11. Recommendation of Brokers 3.70 1.074
12. Recommendation of Financial Advisors 3.66 1.187
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S.No Statements Mean S.D
13. Recommendation of Peers 3.28 1.107
14. Financial report 3.64 1.295
15. Fundamental Analysis 3.71 1.145
16. Technical Analysis 3.62 1.113
17. Training Programs 3.43 1.196
18. Own Ideas 4.06 1.049
19. Media Coverage of the stock 3.45 1.419
20. Familiarity with the products and services 4.12 1.110
21. Expected Stock split 3.24 1.195
22. Face value of the share 3.39 1.358
23. Past Experience 4.15 1.154
Source: Primary Data
The statement with the lowest mean is identified as the least important
factor and the highest mean is identified as the most important factor highly
considered in portfolio construction by the investors.
The table 5.1 reflects the fact that the highest agreement is observed for
the statement “Past experience” with a mean score of 4.15 and standard deviation
of 1.154 followed by “Familiarity with the products and services” with a mean
score of 4.12 and standard deviation of 1.110. The lowest agreement is observed
for the statement ‘Expected stock split’ with a mean score of 3.24 and the
standard deviation is 1.107.
5.2.1 Factor Analysis and Data Reduction Variables
Another useful statistics is the Kaiser-Meyer-Oklin (KMO) test of

sampling adequacy1. Generally, the KMO measure of sampling adequacy must
be greater than 0.5, which is desirable. The value of desirability for higher
KMO is as follows, KMO > 0.9 Narvekkiys; 0.8 < KMO < 0.9 Meritorious;
0.7 < KMO < 0.8 Middling; 0.6 < KMO < 0.7 Mediocre; 0.5 < KMO < 0.6
Miserable and KMO < 0.5 Unacceptable.2
1
Marjorie A.Pett, Nancy R.Lackey and John J.Sullivan,“Making Sense of Factor Analysis”,
Sage Publications, New Delhi, 2003, pp:3-78.
2
John Adams, Hafiz T. A. Khan, Robert Raeside and David White, “Research Methods for
Graduate Business and Social Science Students”, Response Books, New Delhi, 2009, p: 217.
179
TABLE 5.2
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. 0.763
Approx. Chi-Square 3828.601

Bartlett's Test of Sphericity df 276
Sig. 0.000
The sampling adequacy level is acceptable as the value of KMO statistic

test was 0.763 which is above 0.5 and hence it is taken as the level for
acceptance. The value of chi-square for Bartlett test of sphericity was also
significant. These tests confirm that the data were adequate for factor analysis.
Hence factor analysis was considered an appropriate technique for analyzing the
data.
As a first step to explain the statements considered for portfolio

construction, factor analysis was performed on these variables to explore the
underlying common dimensions if any. Factor analysis can be categorized as an
interdependence technique where the variables are simultaneously considered.
It is a multi-variate method whose primary purpose is data reduction and
summarization. The method of factor analysis addresses the problem of
analyzing the interrelationships among a large number of variables and then
explaining these variables in terms of their common underlying dimensions
(factors). These factors are some linear combination of the original variables and
the factors are chosen in such a way that most of the variance present in the data
is explained by the solution. The objective of factor analysis is to find a factor
matrix such that it has the least complexity leading to a parsimonious description
of the relationships between the observed variables. The solution must be
meaningful and interpretable with concept and the similar variables loading on
the same factors. Factor analysis was used, using the principal component
analysis method in SPSS. This is an index used to evaluate the appropriateness
of factor analysis in the study. The usual method for rotation is varimax rotation.
The idea here is that the interpretability of a factor can be measured by the
variance of the square of its factor loadings.
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The statements describing the factors considered for portfolio
construction are subjected to factor analysis using Principal Component Analysis
to identify the important factors that are highly viewed for portfolio construction.
TABLE 5.3
Total Variance Explained
Rotation Sums of Squared Loadings
Factor
Component Eigen Values % of Variance Cumulative %
1 3.547 14.779 14.779
2 2.676 11.151 25.930
3 2.615 10.896 36.827
4 2.499 10.414 47.241
5 2.407 10.030 57.270
6 1.868 7.785 65.056
7 1.479 6.161 71.217
The principal component analysis is a multivariate technique for

identifying the linear components of a set of variances. The seven factors
extracted together account for 71.22 per cent of the total variance. This is pretty
good because it is able to economise on the number of variables (from 23, it has
been reduced to seven underlying factors). Eigen values explain the variance
among the factors. A low Eigen value contributes very little to the explanation of
variances in the set of variables being analyzed. Only the variables with the
Eigen values greater than one are retained. The rotated factor matrix for the
23 variables relating to the post- investment pattern of investors is given in
Table 5.4.
181
TABLE 5.4
Rotated Component Matrix
Component
1 2 3 4 5 6 7
Financial Statement .838

Quarterly Report .754
Market Share .737
Industrial Growth .728
Fundamental Analysis .727
Technical Analysis .719
Own Ideas .645
Recommendations of peers .629
Ownership .791
Brand name .775
Size of the company .763
Turn over .576
Recommendation of Analyst .768
Recommendations of Financial .751
Advisors
Recommendations of brokers .613
Training Program .571
Stock split .878
Geographical Location .761
Face value of share .757
Past Experience .847
Media coverage of stock .612
Familiarity with the stock .851
Satisfactory dividend .464
Extraction Method: Principal Component Analysis.
a. Rotation converged in 7 iterations.
It is clear from the table 5.4 that 23 statements had been extracted into
seven heads, namely, F1, F2, F3, F4, F5, F6, F7. Extraction method used was
Principal Component Analysis. Rotation method used was varimax with Kaiser
Normalization. The Rotation converged in 7 iterations. Based on the results of
factor analysis, new names are identified and are discussed in the following
pages.
182
F1– Returns Analysis
The most important factor influencing the portfolio construction of the

investors, based on Eigen values is named as “Returns analysis”. The variables
in returns analysis were ‘Financial statement’, ‘Quarterly report’, ‘Market share’
and ‘Industrial growth’. The Eigen value for Factor 1 was 3.547 and the
percentage variance was 14.779. The factor loading of ‘Financial statement’ was
0.838, followed by ‘Quarterly report’ was 0.754, ‘Market share’ was 0.737 and
‘Industrial growth’ was 0.728 as shown in table 5.5.
TABLE 5.5
Significant Loading of Variables on Varimax Factor 1
Sl. No Variables Factor Loadings Percentage of Variance
1. Financial Statement 0.838

2. Quarterly Report 0.754
14.779
3. Market Share 0.737
4. Industrial Growth 0.728
From the table 5.5 it could be seen that the Factor 1 has got significant
loading on four dimensions and it is understood that the most significant post-
investment pattern of investors are analyzing Financial statements and Quarterly
report. These two variables are significant as it is the most common report dealt
by the investors in order to judge the stock performance.
The investors are cautious in analysing the financial statements, quarterly

reports, market share value and industrial growth level of the investing
companies. Thus it can be concluded that Return analysis is the major factors
influencing the portfolio construction process of the investors.
F2 –Decision Making Analysis
The next important post- investment behavior of investors based on Eigen

values is named as “Decision making analysis”. The various variables in
Decision making analysis were ‘Fundamental analysis’, ‘Technical analysis’,
‘Own ideas’ and ‘Recommendation of peers’. The Eigen value for Factor 2 was
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2.676 and the percentage variance was 11.151. The factor loading of
‘Fundamental analysis’ was 0.727, followed by ‘Technical analysis’ was 0.719,
‘Own ideas’ was 0.645 and ‘Recommendation of peers’ was 0.728 as shown in
table.
TABLE 5.6
Sl. No Variables Factor Loadings Percentage of Variance
1. Fundamental Analysis 0.727

2. Technical Analysis 0.719
3. Own Ideas 0.645 11.151
Recommendations of
4. 0.629
peers
From table 5.6, it could be seen that the Factor 2 has got significant
loading on four dimensions. They are positive loadings. The factor is named as
“Decision making analysis”. It is understood that the significant post -investment
pattern of investors are ‘Fundamental analysis’ (0.727) and ‘Technical analysis’
(0.719).
F3 - Corporate Governance Analysis
The details of the corporate which issues the stock is analyzed by the
respondents before adding it to their portfolio and the variables such as
ownership, brand name, size of the company and turn over are considered. The
Eigen value for Factor 3 was 2.615 and the percentage variance was 10.896 and
these variables are christened as “Corporate governance analysis” and tabulated
in table 5.7.
TABLE 5.7
Sl.No Variables Factor Loadings Percentage of Variance
1. Ownership 0.791
2. Brand name 0.775
10.896
3. Size of the company 0.763
4. Turn over 0.576
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“Corporate Governance analysis”. It is understood that the significant factors
that the respondents analyse are the ‘Ownership of the company’ (0.791)
followed by the ‘Brand popularity’ (0.775) and concentrate on ‘Size of the
company’ (0.763) and ‘Turnover of the company’ (0.576 ) too.
F4 - Support Services Analysis
The analysis of stocks at the time of buying and selling is made by the
investors only with the support of analyst, financial advisors, brokers or through
some training programmes and here these four variables has been named as
“Support services analysis”. The Eigen value for Factor 4 was 2.499 and the
percentage variance was 10.414.
TABLE 5.8
Factor Percentage of
Sl.No Variables
Loadings Variance
1. Recommendation of Analyst 0.768

Recommendations of Financial
2. 0.751
Advisors 10.414
3. Recommendations of brokers 0.613
4. Training Program 0.571
“Support services analysis”. It is understood that the significant post- investment
behavior of investors are ‘recommendation of analyst’ (0.768) followed by the
‘recommendations of financial advisors’ (0.751) and ‘recommendations of
brokers’ (0.613) and ‘training Program’ (0.571).
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F5-Market positioning analysis
Investors while bucketing their stocks will consider the Face value of the
share, Geographical location of the company and Stock split. Any positive news
about these three variables will drag the price of the shares to a new high. The
Eigen value for Factor 5 was 2.407 and the percentage variance was 10.030.
These three variables based on factor loadings are tabulated and named as
“Market positioning analysis”.
TABLE 5.9
Sl.No Variables Factor Loadings Percentage of Variance
1. Stock split 0.878
2. Geographical Location 0.761 10.030
3. Face value of share 0.757
loading on three dimensions. They are positive loadings. The factor is named as
“Market Positioning analysis”. It is understood that the significant post-
investment pattern of investors are ‘Stock split’ (0.878) followed by the
‘Geographical location’ (0.761) and ‘Face value of share’ (0.757). Stock split
and Face value of the share plays a dominant role while bucketing the stocks.
F6-Image building analysis
Past experience of the investors /traders enables them to identify the

forthcoming ups and downs in the stock market and Media coverage of the stock
brings to light the performance of the stock ,hence both variables are essential
and it is named as “Image building analysis”. The Eigen value for Factor 6 was
1.868 and the percentage variance was 7.785.
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TABLE 5.10
Factor Percentage of
Sl.No Variables
Loadings Variance
1. Past Experience 0.847
7.785
2. Media coverage of stock 0.612
loading on two dimensions. They are positive loadings. The factor is named as
“ Image building analysis”. It is understood that the significant post- investment
pattern of investors are ‘Past experience’ (0.847) followed by ‘Media coverage of
stock’ (0.612). It is evident that Past experience and Media coverage or stock
recommended through media are the prior choice of investors for investment as
the image built in their minds plays a vital role.
F7-Goodwill Analysis
The participants of the stock market’s main motto is profit booking and
to reap huge profit it is advisable to invest/trade in stocks which are familiar in
the public and risk averse investors wish to receive a satisfactory dividend from
the stocks and hence these two variable are named as “Goodwill analysis”. The
Eigen value for Factor 7 was 1.479 and the percentage variance was 6.161.
TABLE 5.11
Percentage of
Sl.No Variables Factor Loadings
Variance
1. Familiarity with the stock 0.851
6.161
2. Satisfactory dividend 0.464
loading on two dimensions. They are positive loadings. The factor is named as
“Goodwill analysis”. It is understood that the significant post- investment
behavior of investors are ‘Familiarity with the stock’ (0.851) followed by the
‘Satisfactory dividend’ given by the company (0.464). Familiarity with the stock
187
and Satisfactory dividend are the major factors that influence the selection of a
stock and hence it is named as Goodwill analysis.
The abstract of the factor analysis with top loading variables are exhibited
in table 5.12.
TABLE 5.12
Abstract of Factor Analysis
Factor
S.No Factor Name Surrogative Variables
Loadings
FACTOR 1 Returns analysis Financial Statement 0.838
FACTOR 2 Decision making analysis Fundamental Analysis 0.727
FACTOR 3 Corporate Governance Analysis Ownership 0.791
Recommendation of
FACTOR 4 Support services Analysis 0.768
Analyst
FACTOR 5 Market Positioning Analysis Stock split 0.878
FACTOR 6 Image building Analysis Past Experience 0.847
FACTOR 7 Goodwill Analysis Familiarity with the 0.851

stock
5.2.3 Association of Demographic Profile and Investment analysis for

Portfolio Construction
The association of demographic profile of the respondents and the

analysis made by them for portfolio construction is tested using one way
ANOVA and the following hypothesis is framed.
5.2.3.1 Age Group
Respondents of various age group may or may not differ at the time of
investment analysis and hence it is essential to study the association of age with
that of seven investment analysis derived from factor analysis made for portfolio
construction.
Ho1: There is no significant association between the age group of the

respondents and the investment analysis made by them for portfolio construction.
188
TABLE 5.13
Age group and the Investment analysis made for Portfolio Construction
Age Group in years
Investment F
51 & p value Result
analysis 20-30 31-40 41-50 value
above
2.05a 1.92 a 2.09 a 2.17 a Not
Goodwill analysis 1.369 0.252
(0.773) (0.865) (0.854) (0.822) significant
2.05a,b 2.12b 2.00 a,b 1.83a Not
Return analysis 2.410 0.067
(0.773) (0.689) (0.679) (0.706) significant
Decision making 1.86a 2.21b 2.36b 2.35b
5.327 0.001 Significant
analysis (0.875) (0.773) (0.777) (0.872)
Corporate 1.86a 1.78a
2.12b 2.27b
governance 7.295 0.000 Significant
analysis (0.552) (0.732) (0.755) (0.725)
Market positioning 2.00 b,c 2.12c 1.86a 1.70a

analysis (0.608) (0.732) (0.821) (0.754)
1.86 a 2.00a 1.95a 1.91a Not
Image analysis 0.462 0.709
(0.699) (0.782) (0.831) (0.722) significant
Support services 2.05 b 2.15 b 2.0 b 1.74a
analysis (0.711) (0.705) (0.773) (0.741)

Note: i) The value in the table refers to Mean score
ii) The value within bracket refers to SD
iii) Different alphabets between age denotes significance at 5% level using
Duncan Multiple Range Test (DMRT)
The above table 5.13 unfolds the fact that the ‘p’ value is less than 0.05 in
case of analysis such as Decision making (p = 0.001), Corporate governance
(p = 0.000). Market positioning (p = 0.002) and Support services (p = 0.004) and
hence the null hypothesis framed is rejected. This implies that the above said are
the most concentrated analysis by the respondents at the time of construction of
portfolio. The Return analysis (p = 0.067), Goodwill analysis (p = 0.252) and
Image analysis (p = 0.709) are least dealt with by the respondents and hence the
‘p’ value is greater than 0.05 which is not significant and the hypothesis framed is
accepted for Return analysis, Goodwill analysis and Image analysis. More over
the Duncan Multiple Range Test (DMRT) reveals that the analysis for portfolio
construction made by the respondents in the age group of 20-30 years, 31 – 40
years, 40 - 51 years and above 51 years differ significantly with each other age
groups. But the respondents of the age group do not significantly differ in case of
Goodwill analysis and Image analysis.
189
5.2.3.2 Education
Education plays a dominant role in investment analysis and hence the

association between educational qualification of the respondents and investment
analysis made by them is analysed.
Ho2: There is no significant association between the education of the

TABLE 5.14
Education and the Investment analysis made for Portfolio Construction
Education
Investment F p
High Gradu- Post Profes- Result
analysis Others value value
School ate Graduate sional
Goodwill 1.93 1.79 2.49 2.05 2.25

analysis (0.688) (0.836) (0.699) (0.872) (0.866)
1.73 2.08 2.09 2.00 2.00 Not

(0.688) (0.706) (0.722) (0.713) (0.739) significant
Decision making 2.07 2.32 2.13 2.30 1.50

analysis (0.863) (0.834) (0.803) (0.850) (0.522)
Corporate 1.93 1.87

2.21 2.00 1.50
analysis (0.688) (0.697) (0.684) (0.781) (0.522)
Market 1.80 2.09

2.08 1.75 1.25
positioning 5.945 0.000 Significant
analysis (0.757) (0.742) (0.781) (0.628) (0.452)
1.73 1.89 2.13 1.90 2.25

Image analysis 2.608 0.036 Significant
(0.580) (0.824) (0.746) (0.775) (0.452)
Support services 1.87 2.13 2.04 1.95 1.50

analysis (0.625) (0.698) (0.812) (0.811) (0.522)

The above table 5.14,unfolds the fact that the computed ‘p’ value is less
than 0.05 in case of the analysis such as Decision making (p = 0.010), Corporate
governance (p = 0.001), Market positioning (p = 0.000), Goodwill analysis
(p = 0.000), Image analysis (p = 0.036) and Support services analysis (p = 0.026)
and hence the null hypothesis framed is rejected. This implies that the academic
background enables the respondents to analyse deeply the above said analysis at
190
the time of construction of portfolio. Education influences the analysis of stocks
for portfolio construction made by the investors. For Return analysis (p=0.071)
alone, ‘p’ value is greater than 0.05 which is not significant and the hypothesis
framed is accepted for Return analysis
5.2.3.3 Occupation
Based on the occupation of the respondents, the investment analysis may

vary. Depending upon the time available to them to track the market and
consultation with the peers they vary in the investment analysis made for
portfolio construction; hence the association is tested and tabulated in table 5.15.
Ho3: There is no significant association between the occupation of the

TABLE 5.15
Occupation and the Investment analysis made for Portfolio Construction
Occupation
Investment F p
Entrep- Profes- House Govt. Put Result
analysis Retired value value
reneur sional wife EmployeeEmployee
1.82 1.81 2.22 2.58 1.92 2.38

Goodwill analysis 7.497 0.000 Significant
(0.676) (0.737) (0.801) (0.770) (0.897) (0.847)
2.15 2.00 2.22 2.00 2.12 1.46

Return analysis 6.412 0.000 Significant
(0.577) (0.622) (0.801) (0.828) (0.716) (0.643)
Decision making 2.45 2.24 2.00 2.33 2.12 1.92

analysis (0.746) (0.875) (0 961) (0.756) (0.770) (0.929)
Corporate 2.45 1.86 1.89 2.00 2.00 1.77

governance analysis (0.675) (0.564) (0.751) (0.926) (0.637) (0.706)
Market positioning 2.10 2.05 2.00 1.92 1.96 1.46

analysis (0.775) (0.658) (0.832) (0.770) (0.725) (.0643)
2.15 1.81 2.00 2.08 1.80 1.92 Not
(0.732) (0.669) (0.679) (0.874) (0.854) (0.623) significant
Support services 2.35 1.90 1.56 2.33 2.12 1.46

analysis (0.659) (0.689) (0.698) (0.632) (0.770) (0.505)

191
The above table 5.15, unfolds the fact that the computed p value is less
than 0.05 in case of the analysis such as Decision making (p = 0.023),, Corporate
governance (p = 0.000),
0.000 Market positioning (p = 0.001), Goodwill analysis
(p = 0.000), Return analysis (p = 0.000) and Support services analysis
(p = 0.000) and hence the null hypothesis framed is rejected. This implies that
the occupation or designation of the respondents determines the analysis to be
made for portfolio construction.
construction Occupation enables the respondents to analyse
deeply the above said analysis at the time of construction of portfolio. For Image
analysis (p = 0.062) alone
alone, p value is greater than 0.05 which is not significant
s
and the hypothesis
is framed is accepted for Image analysis and hence can be
concluded that it is the least concentrated analysis of stocks for portfolio
construction.
5.2.3.4 Monthly Income

ncome
Based on the monthly income of the respondents the stock analysis will
be made by them. It is tested with a motive that the monthly income of the
respondents is a major factor in choosing the stocks or portfolio construction,
hence the hypothesis framed is
Ho4: There is no significant association between the monthly income of the

construction
TABLE 5.16
Monthly Income
ncome and the Investment analysis made for Portfolio Construction
onstruction
Monthly Income
F p
Investment analysis 10000- 25001- 50001- Above Result
value value
25000 50000 75000 75,000
1.85 2.09 2.45 1.96
(0.896) (0.770) (0.794) (0.852)
1.70 2.11 2.45 1.93
(0.660) (0.724) (0.794) (0.447)
Decision making 1.70 2.32 2.36 2.60
analysis (0.813) (0.831) (0.653) (0.618)
Corporate governance 1.85 1.91 2.36 2.40
analysis (0.594) (0.712) (0.653) (0.809)
Market positioning 1.85 1.81 2.27 2.27
analysis (0.654) (0.765) (0.761) (0.688)
1.59 1.98 2.27 2.20
(0.738) (0.702) (0.876) (0.661)
Support services 1.81 1.96 2.18 2.40
analysis (0.673) (0.773) (0.584) (0.720)
Source: Primary Data Note: i) The
he value in the table refers to Mean score
ii) The
he value within bracket refers to SD
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The above table unfolds the fact that the computed p value is less than
0.05 in case of the analysis such as Decision making (p = 0.000), Market
positioning (p = 0.000), Goodwill analysis (p = 0.004), Return analysis
(p = 0.000), Corporate governance analysis (p = 0.000), Image analysis
(p = 0.000) and Support services analysis (p = 0.000) and hence the null
hypothesis framed is rejected. This implies that the monthly income of the
respondents plays a dominant role in deciding the analysis to be made for
portfolio construction. Based on the monthly income of the respondents they
deeply analyse at the time of construction of portfolio.
5.2.3.5 Financial Requirement
Investment analysis is made by the respondents may differ based on their

financial requirement hence it is appropriate to study the association of financial
requirement and investment analysis made for portfolio construction.
Ho5: There is no significant association between the financial requirement of the

TABLE 5.17
Financial Requirement and the Investment analysis made for Portfolio
Construction
Financial requirement
Investment F p
Fluctuate Fluctuate Stable & Result
analysis value value
widely moderately fixed
2.07 1.89 2.20
(0.780) (0.803) (0.865)
2.07 2.09 1.90 Not
(0.780) (0.598) (0.794) significant
Decision making 2.13 2.32 2.10 Not
2.396 0.093
analysis (0.815) (0.823) (0.853) significant
Corporate 2.20 2.11 1.85
governance analysis (0.757) (0.650) (0.754)
0.000 Significant
analysis (0.447) (0.736) (0.756) 0
2.00 1.86 2.00 Not
(0.739) (0.759) (0.768) significant
Support services 2.13 2.02 1.95 Not
1.025 0.360

193
The above table depicts the fact that the computed ‘p’ value is less than
0.05 in case of, Market positioning analysis (p = 0.000), Goodwill analysis
(p = 0.015), and Corporate governance analysis (p = 0.003). Hence the null
hypothesis framed is rejected. Return analysis (p = 0.093), Image analysis
(p = 0.306) and Support services analysis (p = 0.360) and Decision making
analysis (p = 0.093) are not significant as the ‘p’ value is greater than 0.05. So
the null hypothesis framed is accepted. This implies that financial requirement of
the respondents does not play a dominant role in majority of the analysis of
stocks for portfolio construction.
5.2.3.6 Percentage of Savings on the Income

Investment analysis is made by the investors based on the percentage of
his/her savings on the income. It is noteworthy to find whether there is any
association between various investment analysis and their percentage of savings.
Ho6: There is no significant association between the percentage of savings of the

TABLE 5.18
Percentage of Savings on the income and the Investment analysis
made for Portfolio construction
Percentage of Savings
Investment Between Between Between F p
Below Result
analysis 10%- 15%- 20% - value value
10%
15% 20% 25%
2.17 1.94 1.97 2.15 Not
Goodwill analysis 1.547 0.202
(0.808) (0.779) (0.800) (0.950) significant
1.91 2.12 2.20 1.74
(0.750) (0.702) (0.545) (0.803)
analysis (0.889) (0.860) (0.674) (0.893)
Corporate 2.03 2.04 2.20 1.75
governance analysis (0.666) (0.521) (0.753) (0.853)
analysis (0.690) (0.711) (0.776) (0.765)
1.86 1.88 2.00 2.00 Not
(0.710) (0.702) (0.821) (0.792) significant
Support services 1.77 1.88 2.33 1.96
analysis (0.684) (0.644) (0.750) (0.762)
194
The above table unfolds the fact that for the analysis such as goodwill
analysis (p = 0.202), return analysis (p = 0.000) and image analysis
(p = 0.551), the p value is greater than 0.05 and hence the null hypothesis is
accepted. But for Decision making analysis (p = 0.003), Market positioning
analysis (p = 0.024), Corporate analysis (p = 0.001), Support services analysis
(p = 0.000) ‘p’ value is less than 0.05 and hence the null hypothesis framed is
rejected. This implies that the percentage of savings of the respondents plays a
dominant role in analyzing the stocks for portfolio construction.
5.2.4 Social Status and the Investment analysis made for Portfolio
Construction
The association of the Social status of the respondents namely gender,
marital status and type of family and the analysis made for portfolio construction
is analyzed using t-test.
5.2.4.1 Gender
Investment analysis may vary with gender. The point of view about a
particular stock may vary between male and female. Moreover there is a
widespread apprehension that women are sensitive towards stock selection and
hence it is essential to study the relation between gender and investment analysis
made by them.
Ho7: There is no significant association between the male and female

respondents for the investment analysis made by them for portfolio construction.
TABLE 5.19
Gender and the Investment analysis made for Portfolio Construction
Gender F p
Investment analysis Result
Male Female value value
Goodwill analysis 1.99 (0.797) 2.12 (0.882) 9.928 0.002 Significant
Return analysis 1.98 (0.658) 2.05 (0.788) 12.082 0.001 Significant
Decision making analysis 2.21 (0.785) 2.19 (0.910) 15.474 0.000 Significant
Corporate governance
2.03 (0.671) 2.00 (0.790) 7.308 0.007 Significant
analysis
Market positioning analysis 1.79 (0.715) 2.14 (0.745) 0.051 0.821 Not significant
Image analysis 1.88 (0.699) 2.02 (0.834) 8.573 0.004 Significant
Support services analysis 2.03 (0.767) 1.98 (0.710) 2.431 0.120 Not significant
195
The above table 5.19, depicts the fact that the ‘p’ values are greater than
0.05 in case of Market positioning analysis (p = 0.821), and Support services
analysis (p = 0.120), hence the null hypothesis framed is accepted. Goodwill
analysis (p = 0.002), Return analysis (p = 0.001), Decision making analysis
(p = 0.000), Corporate Governance analysis (p = 0.007) and Image analysis
(p = 0.004) are significant as the ‘p’ value is less than 0.05.So the null hypothesis
framed is rejected. This implies that gender of the respondents plays a dominant
role in majority of the analysis of stocks for portfolio construction.
5.2.4.2 Marital Status
The respondents’ needs, wants, preference sand analysis made are closely
related to their marital status. The investment analysis made by the investors
may change after marriage. Hence a study about the association of marriage and
investment analysis as a post-investment behavior is a most for the present
research. The hypothesis is framed and tested and the results are depicted in
table 5.20.
Ho8: There is no significant association between the marital status of the

TABLE 5.20
Marital status and the Investment analysis made for Portfolio Construction
Marital Status p
Investment analysis F value Result
Married Single value
Goodwill analysis 1.99 (0..812) 2.16 (0.875) 5.779 0.017 Significant
Return analysis 1.99 (0.654) 2.06 (0.831) 21.056 0.000 Significant
Decision making Not

2.22 (0.822) 2.16 (0.875) 1.610 0.206
analysis significant
Corporate governance Not
2.04 (0.697) 1.97 (0.774) 2.824 0.094
Market positioning Not
1.81 (0.714) 2.22 (0.743) 0.691 0.406
Support services
1.96 (0.777) 2.13 (0.653) 5.023 0.026 Significant
analysis

196
The above table 5.20, depicts the fact that the computed p value is greater
than 0.05 in case of Decision making analysis (p = 0.206), Corporate Governance
analysis (p = 0.094), Market positioning analysis (p = 0.406). Hence the null
hypothesis framed is accepted for the above analysis. Goodwill analysis
(p = 0.017), Return analysis (p = 0.000) and Support services analysis (p = 0.026)
and Image analysis (p = 0.015) are significant as the p values are less than 0.05 so
the null hypothesis framed is rejected.
5.2.4.3 Type of Family
The investors’ investment analysis may be influenced by the type of

family. The post-investment pattern of investment analysis may vary in case of
joint family or a single family because in a joint family there are many
possibilities of family members involving in the market to discuss and give
suggestions. Hence the association of type of family and the investment analysis
needs to be studied.
Ho9: There is no significant association between the type of family of the

TABLE 5.21
Type of Family and the Investment Analysis made for Portfolio Construction
Investment Type of family p
F value Result
analysis Nuclear Joint value
Goodwill analysis 2.22 (0.842) 1.87 (0.792) 3.923 0.049 Significant
Return analysis 2.04 (0.730) 1.98 (0.702) 0.741 0.390 Not significant
Decision making
2.00 (0.860) 2.39 (0.771) 0.915 0.339 Not significant
analysis
Corporate
2.00 (0.672) 2.04 (0.768) 7.499 0.007 Significant
governance analysis
Market positioning
1.88 (0.748) 2.00 (0.743) 1.230 0.268 Not significant
analysis
Support services
1.76 (0.718) 2.25 (0.684) 0.601 0.439 Not significant
analysis

197
The above table 5.21, depicts the fact that the computed p values are
greater than 0.05 in case of Return analysis (p = 0.390), Decision making analysis
(p = 0.339), Market positioning analysis (p = 0.268), and Support services
analysis (p=0.439). Hence the null hypotheses framed is accepted for the above
analysis. Goodwill analysis (p = 0.049), Corporate Governance analysis
(p = 0.007) and Image analysis (p = 0.003) are significant as the ‘p’ value is less
than 0.05 so the null hypothesis framed is rejected. This reveals that the type of
family of the respondents does not play a dominant role in the analysis of stocks
for portfolio construction as majority of the statements are not significant.
5.2.4.4 Period of Savings
Saving and investing money at an early stage enables one to create a

decent corpus. Hence the period of savings is given importance and the
association of investment analysis and the period of savings is studied.
Ho10- There is no significant association between the period of savings of the

respondents and the investment analysis made by them for portfolio construction
TABLE 5.22
Period of Savings and the Investment analysis made for Portfolio
Construction
Period of Savings
Investment F p
Early Career Mid Career Retirement Result
analysis value value
Period Period Stage
1.76 2.10 2.33
(0.734) (0.866) (0.805)
2.09 2.17 1.63
(0.662) (0.654) (0.759)
1.728 0.179
Corporate 2.12 2.12 1.71
governance analysis (0.679) (0.665) (0.795)
Market positioning 2.15 1.98 1.58
analysis (0.651) (0.743) (0.765)
2.00 1.88 1.96 Not
Image analysis .717 0.489
(0.771) (0.765) (0.740) significant
Support services 2.32 1.86 1.83
analysis (0.760) (0.641) (0.751)
198
0.05 in case of the analysis such as, Market positioning (p = 0.000), Goodwill
analysis (p = 0.000), corporate analysis (p = 0.000) Return analysis (p = 0.000),
and Support services analysis (p = 0.000) and hence the null hypothesis framed
is rejected. But the ‘p’ value is greater than 0.05 for Decision making analysis
(p = 0.179) and Image analysis (p = 0.489) and hence the null hypothesis is
accepted. This implies that the period of savings of the respondents plays a
dominant role in analyzing the stocks for portfolio construction.
5.2.5 Association of Investment Profile and Investment analysis Made

for Portfolio Construction
The association between some of the most important investment profile

and the analysis made for portfolio construction is tested using one way ANOVA.
5.2.5.1 Investment Mechanism
Based on the respondents’ investment mechanism whether he or she is a

trader, investor or both the investment analysis may vary. A trader has to make
360o analysis at the time of trading and he has to alert and expert in all the factors
that needs to be analysed. On the other hand a long term investor must be aware
of basic analysis to add a fundamentally strong stock to his portfolio. Hence the
association between the investment mechanism and the investment analysis is
studied and the results are depicted in table 5.23.
Ho11: There is no significant association between the investment mechanism of

the respondents and the investment analysis made by them for portfolio
construction.
199
TABLE 5.23
Investment Mechanism and the Investment analysis made for Portfolio
Construction
Investment Mechanism F p
Investment analysis Result
value value
Investor Trader Both
2.13 1.80 2.09
(0.861) (0.755) (0.836)
2.06 2.10 1.94
Return analysis 1.478 0.230 Not Significant
(0.708) (0.630) (0.750)
Decision making 1.97 2.35 2.29
analysis (0.852) (0.799) (0.818)
Corporate governance 1.97 2.25 1.96
analysis (0.640) (0.773) (0.737)
analysis (0.721) (0.775) (0.724)
1.78 2.30 1.90
Image analysis (0.699) (0.646) (0.800)
analysis (0.721) (0.646) (0.734)

The above table 5.23 unfolds the fact that the computed ‘p’ value is less
than 0.05 in case of the stock analysis such as Market positioning analysis
(p = 0.001), Goodwill analysis (p = 0.039), Decision making analysis (p = 0.004),
Corporate analysis (p = 0.022), and Support services analysis (p = 0.000) and
hence the null hypothesis framed is rejected. But ‘p’ value is greater than 0.05
for Return analysis (p = 0.230) alone and hence the null hypothesis is accepted.
This implies that the investment mechanism of the respondents plays a dominant
role in analysing the stocks for portfolio construction.
5.2.5.2 Mode Preferred
Mode preferred and the investment analysis made may vary because in
case of self online trading the respondent has to consider all the factors essential
for investment analysis and construct a wealth-creating portfolio. Incase if the
respondents are dealing in the market through brokers they will be guided by the
brokers. Even then they must be aware of some fundamental analysis to take a
valid decision. Hence there arose the need for the study.
200
Ho12: There is no significant association between the mode preferred by the
TABLE 5.24
Mode Preferred and the Investment analysis made for Portfolio
Construction
Mode Preferred
Dial Self-
F p
Investment Analysis Result
and Online Both value value
Trade trading
2.23 1.93 1.58
(0.777) (0.861) (0.770)
1.90 2.11 2.17
(0.716) (0.660) (0.811)

1.724 0.180
analysis (0.827) (0 .841) (0.862) Significant
Corporate governance 1.92 2.03 2.42

analysis (0.732) (0.729) (0.500)

analysis (0.699) (0.725) (0.841)
1.88 1.92 2.25
(0.672) (0.799) (0.937)

analysis (0.746) (0.702) (0.649)

0.05 in case of stock analysis such as Market positioning (p = 0.000), Goodwill
analysis (p = 0.000), Corporate governance analysis (p = 0.001), Return analysis
(p = 025), Image analysis (p = 0.031) and Support services analysis (p = 0.000)
and hence the null hypothesis framed is rejected. But for Decision making
analysis (p = 0.180) alone p value is greater than 0.05 and hence the null
hypothesis is accepted. This implies that the mode preferred by the respondents
plays a dominant role in deciding the analysis to be made for portfolio
construction.
201
5.2.5.3 Investment Objectives
Based on the investment objectives the investment analysis may vary. If

the objective is dividend or interest then they choose stocks that yield greater
dividends. If the objective is capital security then they may prefer blue chip
stocks where in there is assured returns. Hence association of investment
objective and investment analysis is essential to be studied.
Ho13: There is no significant association between the investment objectives of

the respondents and the investment analysis made by them for portfolio
construction.
TABLE 5.25
Investment Objectives and the Investment analysis made for Portfolio
Construction
Investment objectives
Investment F p
Dividend/ Growth Capital Capital Result
Analysis Tax value value
of Apprecia
Interest Income Security benefits
tion
2.14 2.05 2.04 2.33 1.33

(0.926) (0.768) (0.846) (0.961) (0.485)
1.79 2.09 2.17 1.89 1.50

(0.782) (0.649) (0.692) (0.892) (0.514)
Decision making 1.57 2.21 2.46 2.67 1.83

analysis (0.737) (0.826) (0.768) (0.480) (0.924)
Corporate 1.71 2.15 2.04 2.00 1.67

analysis (0.708) (0.717) (0.615) (0.961) (0.485)
Market positioning 1.71 2.00 1.83 2.22 2.00

analaysis (0.805) (0.746) (0.751) (0.801) (0.000)
2.00 2.00 1.96 1.78 1.50 Not

(0.663) (0.746) (0.795) (0.934) (0.514) Significant
Support services 1.50 2.17 2.00 2.00 2.00

analysis (0.506) (0.783) (0.712) (0.679) (0.594)

202
The above table 5.25, unfolds the fact that the computed ‘p’ value is less
than 0.05 in case of the analysis such as Decision making analysis (p = 0.000),
Market positioning (p = 0.036), Goodwill analysis (p = 0.002), Corporate
governance analysis (p = 0.002), Return analysis (p = 0.001) and Support services
analysis (p = 0.000) and hence the null hypothesis framed is rejected. But for
Image analysis (p = 0.076) alone ‘p’ value is greater than 0.05 and hence the null
hypothesis is accepted. This implies that the Investment objectives of the
respondents play a dominant role in analysing the stocks for portfolio
construction
5.2.4.4 Risk Taking Attitude
Based on the risk taking attitude of the respondents the investment

analysis may vary. People with risk averse attitude prefer blue chip stocks where
in there is assured returns. Hence association of risk taking attitude and
investment analysis is essential to be studied.
Ho14: There is no significant association between the risk taking attitude of the
TABLE 5.26
Risk Taking Attitude and the Investment analysis made for Portfolio
Construction
Risk Taking Attitude
Investment profile F p
High Moderate Low Risk Result
variables value value
risk risk risk Averse
1.98 1.94 2.32 2.07
(0.856) (0.846) (0.765) (0.806)
2.14 2.04 1.86 1.93 Not
(0.689) (0.722) (0.749) (0.684) Significant
analysis (0.830) (0.869) (0.713) (0.894)
Corporate 1.93 2.16 2.07 1.84
governance analysis (0.671) (0.713) (0.735) (0.757)
analaysis (0.654) (0.745) (0.784) (0.763)
1.90 1.96 1.96 1.93
(0.756) (0.842) (0.738) (0.628)
Support services 2.28 2.03 1.84 1.77 Not
1.791 0.149
analysis (0.729) (0.803) (0.565) (0.687) Significant

203
0.05 in case of the analysis such as Decision making analysis (p = 0.001), Market
positioning analysis (p = 0.012), Goodwill analysis (p = 0.011), Corporate
governance analysis (p = 0.002) and Image analysis (p = 0.000) and hence the
null hypothesis framed is rejected. But for Return analysis (p = 0.538) and
Support services analysis (p = 0.149) ‘p’ value is greater than 0.05 and hence the
null hypothesis is accepted. This implies that the risk taking attitude of the
respondents plays a dominant role in analysing the stocks for portfolio
construction.
5.3 INVESTMENT DECISIONS ON CAPITAL MARKET INFORMATION
“Change is not the same as transition.
Change is the destination. Transition is the journey.”3
Day by day and hour by hour there are changes in the SENSEX and Nifty
of the Indian Stock market indices and investors must be aware of the changing
scenario, more over they must be able to predict the future. Information is an
investor’s best tool. It is important to avoid making a decision simply based on
the information that supports the decision. Investors/ Traders should consider
both the positives and negatives, and use logic before finalizing something. It is
necessary to understand the fact that loss and profit depends on the way the
investor makes an investment. When it comes to money and investing, investors
are not always as rational and sometimes they are greedy and their strange
behaviors drag them down to loss. Moreover timing is very important in market
to attain the target for the foreseeable future. In a diversified portfolio, some
securities may not perform as expected some may exceed the expectation. It is
common practice to diversify securities in the portfolio. Stock market is
considered as a roller coaster ride. The market may face Bull Run or sometimes
it may be caught in the clutches of bear. Stock market is volatile and the
3
William Bridges. Qtd in The IRDA: Challenges of Privatization: P H.Sonig in Globalization:
A Threat or Challenge, Magazine Published by Sivakasi Chartered Accountants Association,
Sivakasi, p:41.
204
investor/ trader must be able to judge or predict the market phase and react
accordingly. There are bumpy rides that will burn the hands of the investors but
majority of the retail investors did not conduct any research before investing in
the stock market. They simply follow the institutional investors or the investment
tips rolled in to them by the stock brokers. Market participants are exposed to a
constant flow of information, ranging from quantitative financial data to financial
news in the media, society exchanged opinions and recommendations. Processing
this information is a daunting task, so it would not be surprising that people may
overreact or under react. The respondents reaction to various market information
such as Bull run, Bear Run, Company’s quarterly results better than expected or
below their expectation, dividend announcement, bonus announcement, news of
merger , stock split and so on and their decision are analyzed and depicted in
tables.
5.3.1 Bullish Market
Bullish market is the one where in most of the indices will end in green
i.e. most of the stocks are profitable. Optimism prevails and every one expects a
rise in price of shares. Traders buy in the hope of selling at a later date at a higher
price to make profit. SENSEX soars to a new high and Nifty shows an upward
trend. The investment decision of the investors /traders are depicted in table 5.27.
TABLE 5.27
Decision Taken in Bull Market
Market No. of Chi-Square
Decision p value Result
Information Respondents value
Buy 117 (39)

Bullish Market Sell 105 (35) 7.980 0.018* Significant
Hold 78(26)

(% to total are given in brackets)
*denotes significant value
205
In the Bull Market 39 per cent of the respondents are buying and 35
percent of the respondents are taking the decision of selling while 26 percent of
the respondents are holding the shares. From the above table it is observed that
majority of the investors in the study area are able to predict the bull run and
decide whether to buy or sell as it is supported by the ‘p’ value 0.018 which is
less than 0.05. It can be concluded that there is no vast major difference between
the number of the investors who take the decision of buying and selling.
5.3.2 Bearish Market
Bearish market is the one where in the investors are pessimistic and there
are negative signs. The prices of the majority shares will be decreasing and
indices will end in red. When downward trend is seen in SENSEX and Nifty it
is judged that the market is in the clutches of the bear. A speculator who is a
pessimist expects a fall in prices of shares, so he sells first with the hope of
buying the same at a later date when prices fall to cover up the sale. The
respondents’ decision is depicted in table 5.28.
TABLE5.28
Decision Taken in Bear Market
Market No of Chi-Square
Buy 153(51)
Bearish market Sell 99(33) 55.140 0.001* Significant
Hold 48(16)

From the above table it is found that in the bear market 51 per cent of the
respondents are taking the decision of buying while 33 per cent of the
respondents in Virudhunagar district are taking the decision of selling while 16
per cent of respondents are holding the shares in the portfolio. The ‘p’ value
0.001 is less than the 0.05 and hence it is significant. It can be concluded that
majority of the investors are buying shares in a bear market which is rational.
206
5.3.3 Results Better than Expected
When the quarterly results are better than expected it is human tendency
to purchase the shares. When the company quarterly profit is higher than the
targeted level immediately positive news roll in and it is the most preferred share.
In case if the company is included for indices calculation means surely the
positive news of results better than expected of that company plays a dominant
role in pulling the Nifty or SENSEX. Table 5.29 gives a clear picture of the
respondents’ decision when the results are better than expected.
TABLE5.29
Decision Taken if Results Better than Expected
Buy 119(40)
Results better Significan
Sell 72(24) 12.48 0.002*
than Expected t
Hold 109(36)

From the above table it is clear that majority of the investors forming 40
percent out of 300 respondents are taking the decision of buying while 36 per
cent of the respondents are taking the decision of holding the shares when the
results are above than expectation. 24 per cent of the investors sell their shares.
The ‘p’ value is 0.002 which is significant as it is less than 0.05. It can be
concluded that 40 per cent of the respondents are buying the company’s share
when the results are above expectation means they may be short term investors or
traders and 36 per cent of the respondents are holding means they may be long
term investors or they might not have attain the target profit in that scrip. 24 per
cent are selling means they might be traders or they might have booked
satisfactory returns from that scrip.
207
5.3.4 Results Below Expectation
When the quarterly results of a company are below than expected it is

human tendency to sell the shares and book profit immediately when the negative
news roll in. When the company’s quarterly profit is lower than the targeted
level immediately negative news roll in in case if the company is included for
indices calculation means surely the negative results of company quarterly will
drag down the Nifty or SENSEX. Table 5.30 gives a clear picture of the
respondents’ decision when the results are below expectation.
TABLE 5.30
Decision Taken if Results below Expectation
Buy 60(20)
Results below
Sell 156(52) 49.92 0.001* Significant
expectation
Hold 84(28)

From the above table it is found that when the results are below than
expectation then majority of the respondents i.e. 52 per cent of the respondents
sell their holdings and 28 per cent of the respondents are holding the shares and
20 per cent of the respondents are buying the shares of the company where in the
quarterly results are below the target. The ‘p’ value is 0.001 and so it is
significant as it is less than 5 per cent level. Hence it can be concluded that
majority of the respondents are aware of changing market scenario and taking
decision rationally as vast majority of them are selling their holdings. Mere 20
per cent are buying as they may be influenced by the current market price of the
share or they may be optimistic about the company’s future performance or some
time they may be aggressive risk taking traders. 28 per cent of the respondents
take the decision of holding means they may be long term investors.
208
5.3.5 Dividend Announcement
The companies follow different practices regarding distribution of profits

and retention for expansion and diversification. The market price in turn depends
on the dividend distribution. Dividend is the important objective for staying
invested in the stock market. Dividend incomes from companies are exempt
from taxation in the hands of investors. The following table depicts the picture of
respondents reaction towards dividend announcement.
TABLE 5.31
Decision Taken on Dividend Announcement
Buy 126(42)
Dividend
Announcement
Hold 111(37)
From the above table it is clear that majority of the respondents are
buying when the company is about to announce dividends. 37 percent of the
respondents hold the company’s dividend. 21 per cent of the respondents sell
their shares. The ‘p’ value is 0.001 which is significant as it is less than 0.05
level. Holding the shares when dividend announcement is expected means it will
be surely profitable for the investors. Majority of the investors take the decision
of buying and holding because their objective may be dividend.
5.3.6 Bonus Shares Announcement
Bonus shares are free allotment of shares made out of free reserves of a
company to the existing shareholders in proportion to their present holding of
shares. Retained earnings of a company are kept as reserves in various reserve
accounts. These shareholders’ funds are used for purposes of capital expenditure
or current expenditure of the company. When they reach the level of
accumulation, they are distributed as bonus shares to the present equity holders in
a certain ratio to their existing holdings. The table given below depicts the
respondents’ reaction.
209
TABLE 5.32
Decision Taken on Bonus Announcement
Buy 138(46)
Bonus shares
announcement
Hold 108 (36)
From the above table 5.32, it is clear that majority of the respondents are
buying when the company is about to announce bonus shares. 46 per cent of the
respondents buy the company’s shares on bonus announcement while 18 percent
of the respondents sell their shares. Only 36 per cent of the respondents hold the
shares
ares on announcement of issue of bonus shares. The ‘p’ value 0.001 is
significant as it is less than 0.0
0.05 levels. Holding the shares on bonus shares
announcement means it will be surely profitable for the investors. Majority of
the investors take the decision of buying and holding because their objective is
capital appreciation.
5.3.7 Stock Split Announcement

nnouncement
The division of shares of higher denomination of 100 into smaller

denomination of 50 or 10 is called stock split. Stock splits are mainly carried
out with the intention of increasing liquidity. Once liquidity increases, more
buyers and sellers trade in the stock, which, in turn, helps to discover its true
value. In a stock-split,
split, the outstanding shares are divided into specific numbers of
predetermined shares and the liquidity of the stock increases. This is how
h a
stock-split works. Suppose a company has 100 crore outstanding shares of 10
face value and it announced a split to 2 face value per share. Therefore, one
share of face value 10 will become 5 shares of 2 face value. A person
holding 200 sharess of the company will have 1,000 shares after the stock split
split. In
theory, a split should result in an increase in the number of shareholders as more
investors would buy at lower prices.
210
TABLE 5.33
Decision Taken on Stock Split Announcement
Buy 87 (29)
Stock split
Sell 93(31) 5.81 0.055 Significant
announcement
Hold 120 (40)

From the above table 5.33, it is clear that majority of the respondents are
buying when the company is about to announce bonus shares. 40 per cent of the
respondents hold the company’s shares on stock split announcement while 31 per
cent of the respondents sell their shares and 29 per cent of the respondents buy
their shares on stock split announcement. The ‘p’ value is 0.055 and it is not
significant as it is greater than 0.05 level. Holding the shares on stock split
announcement is a healthy sign of making profit. Majority of the investors take
the decision of holding because their objective is capital appreciation.
5.3.8 News on Merger and Acquisitions
Mergers are made when the result of joining two companies together will
increase the value of both companies. This process is also often referred to as an
acquisition. Sometimes two businesses that are close to or equal in value come
together and form a new corporation with new stock. Other times, one company
in the transaction is significantly larger than the other, and it buys the stock of the
other company and absorbs the of its assets and businesses by issuing stock from
the larger company to shareholders of the smoother company. Sometimes cash is
paid, but stock-for-stock swaps are more common. Shareholders will be given the
opportunity to vote on a merger before it takes place and investor should examine
the income statement and balance sheet of the other company involved in the
acquisition to get a sense of whether the merger will be beneficial or detrimental.
211
TABLE 5.34
Decision Taken on News on Merger and Acquisitions
Market No of Chi-Square p
Decision Result
Information Respondents value value
Buy 87 (29)
Not
News of merger Sell 116 (39) 4.42 0.110
Significant
Hold 97 (32)

From the above table 5.34, it is clear that majority of the respondents, 39
per cent of the respondents are selling their shares in hand when there is news on
merger and acquisitions by the company. Only 32 per cent of the respondents
hold the shares while 29 per cent of the respondents buy the shares. The ‘p’
value is 0.110 and it is not significant as it is greater than 0.05 levels. In-depth
analysis of the company’s decision must be made by the investors in this regard.
5.3.9 Expansion Plans
Like merger the company goes for expansion plans in order to withstand
the market or for many other reasons such as diversification of the products, to
avail Government subsidy, to explore and innovate new products and so on.
Expansion takes place only if the existing company grows.
TABLE 5.35
Decision Taken on Expansion Plans
Buy 95 (32)
Expansion Sell 96 (32) Not
1.05 0.592
plans Significant
Hold 109(36)

212
From the above table 5.35, it is clear that 36 per cent of the respondents
are holding when the company is about to go for expansion. 32 per cent of the
respondents buy the company’s shares on the other hand another 32 per cent of
the respondents sell their shares and ‘p’ value is 0.592 which is greater than 0.05
hence it is not significant .
5.3.10 Diversification Plans
Like merger and expansion companies go for diversification plans in

order to withstand the market and especially for diversification of the products, to
explore and innovate new products Diversification takes place only if the existing
company has reaped a huge profit.
TABLE 5.36
Decision Taken on Diversification Plans
Buy 93(31)
Diversification Not
Sell 99(33) 0.62 0.735
Plans Significant
Hold 105(35)
From the above table 5.36 it is clear that the respondents are in confused
status as 35 per cent of the shareholders are holding the shares while 31 and 33
per cent buy and sell the shares which reflects their confused state of mind. The
‘p’ value is 0.0735 and it is greater than 0 .05 level and hence it is not significant.
The overall summary projects the fact that out of 300 respondents, 117
respondents tends to buy in Bullish market which is not a sound strategy. In
Bearish market 153 respondents take the decision of buying which sounds wise
as they are having the strategy of buying in dips. For the market information
results better than expected 120 respondents favours buying. If the results about
a company is below the investors expectation 84 respondents tends to hold the
stock. In case of Dividend announcement and bonus announcement the
213
respondents’ attitude is buying. 126 respondents tend to buy on Dividend
announcement and 138 respondents are tempted to buy on bonus announcement.
120 respondents prefer to hold the stock in case of Stock split announcement.
When there comes the news of merger, 117 respondents tend to sell and this
market information hasn’t gained majority respondents towards the investors’
reaction of buy, sell or hold. Same is the case with the market information
expansion plans 108 respondents decide to hold and for diversification plans 105
respondents decide to hold the stocks respectively.
5.4 INVESTMENT PROFILE AND DECISION TOWARDS MARKET

INFORMATION
The investigator tried to find the reaction of the respondents towards

capital market information on the basis of investment profile such as period of
savings, time horizon and so on. The association of investment profile and the
respondents reaction upon market information is studied using One way ANOVA
and the reaction towards market information of buy, sell, hold is converted to
three point scale wherein buy is allotted with 3 points, sell with 2 points and hold
with 1 point. Hypothesis is framed and the association is tested.
5.4.1 Period of Savings
The respondents’ reaction to various capital market information may vary

based on the period of their savings as saving and investing.The saved money
wisely in the earlier stages saves them in future. The influence of period of
savings in determining the reaction towards the capital market information is
studied.
Ho15: Period of Savings of the respondents does not determine their reaction
towards Capital market information.
214
TABLE 5.37
Period of Savings of the respondents and
Decision towards Capital Market Information
Period of savings
Market information Early Mid Retirem F value p value Result

Career Career ent
Period Period stage
1.47 1.95 2.29
Bullish Market 27.778 0.000 Significant
(0.609) (0.818) (0.740)
1.76 1.50 1.75 0.011
Bearish market 4.564 Significant
(0.773) (0.666) (0.783)
Results better than 2.06 1.88 1.96
1.173 0.311 Not Significant
Expected (0.877) (0.882) (0.846)
Results below 1.97 2.02 2.33
expectation (0.667) (0.675) (0.692)
1.79 2.02 2.04
Dividend announcement 2.408 0.092 Not Significant
(0.837) (0.942) (0.846)
1.88 1.88 1.96
Bonus announcement 0.197 0.821 Not Significant
(0.871) (0.909) (0.941)
1.88 2.19 2.29
Stock split announcement 6.460 0.002 Significant
(0.800) (0.766) (0.895)
2.06 2.05 1.96
News of merger 0.402 0.669 Not Significant
(0.842) (0.788) (0.680)
2.03 2.14 1.88
Expansion plans 2.451 0.088 Not Significant
(0.861) (0.807) (0.786)
1.85 2.09 2.21
Diversification plan 4.537 0.011 Significant
(0.883) (0.759) (0.768)

From the above table it is evident that the p value is less than 0.05 in
case of respondent’s reaction which is significant towards Bullish market
(p = 0.000), Bearish market (p = 0.011), Results below expectation (p = 0.001),
Stock split announcement (p = 0.002) and Diversification plan (p = 0.011).
Hence the null hypothesis is rejected in the above cases. As the ‘p’ value is
greater than 0.05, null hypothesis is accepted in case of Results better than
expected (p = 0.001), Dividend announcement (p = 0.092), Bonus announcement
(p = 0.821), News of merger (p = 0.669) and Expansion plans (p = 0.088). So it
can be concluded that the period of savings of the respondents plays a dominant
role in taking the decision of buy, sell or hold. Six out of ten statements are
significant hence it can be decided that experience enable them to take active
decision for a market participant.
215
5.4.2 Investment Mechanism
Investment mechanism of investor, trader or both is an important

investment profile based upon which the respondents react towards various
capital market information. A trader has to react wisely and immediately towards
various market information or otherwise he has to burn his hands. The investor
must be aware of the available market information and do a disciplined
investment to reap profit. Hence the association between investment mechanism
and capital market information is studied.
Ho16: Investment mechanism of the respondents does not determine their

reaction towards Capital market information.
TABLE 5.38
Investment Mechanism of the Respondents and Decision towards
Capital Market Information
Investment Mechanism F
Market information p value Result
Investor Trader Both value
1.97 1.45 1.98

(0.732) (0.675) (0.832)
1.56 1.65 1.71
Bearish market 1.116 0.329 Not Significant
(0.831) (0 659) (0.708)
Expected (0.799) (0.896) (0.893)
expectation (0.716) (0.605) (0.679)
2.06 1.75 1.96
(0.904) (0.895) (0.868)
2.19 1.70 1.79
Bonus announcement 7.731 0.001 Significant
(0.850) (0.850) (0.915)
2.19 2.00 2.10
Stock split announcement 0.961 0.384 Not Significant
(0.772) (0.844) (0.850)
2.06 1.95 2.04
(0.831) (0.872) (0.708)
2.13 2.05 1.98
(0.861) (0.746) (0.832)
1.97 1.75 2.20
( 0.814) (0.836) (0.772)

216
From the above table 5.38 it is evident that the p value is less than 0.05
which is significant in case of respondents reaction towards Bullish market
(p = 0.000), Results better than expected (p = 0.026), Results below expectation
(p = 0.002), Dividend announcement (p = 0.101), Bonus announcement
(p = 0.001) and Diversification plan (p = 0.001). Hence the null hypothesis is
rejected in the above cases. As the ‘p’ value is greater than 0.05, null hypothesis
is accepted in case of Bearish market (p = 0.329), News of merger (p = 0.663),
Expansion plans (p = 0.406) and Stock split announcement (p = 0.384). So it can
be concluded that the investment mechanism of the respondents whether he is an
investor, trader or both plays a dominant role in taking the decision of buy, sell or
hold. Five out of ten statements are significant hence it can be concluded that the
respondents’ active decision are based on the investment mechanism that whether
he is an investor or trader.
5.4.3 Mode Preferred
The mode preferred by the respondents has its influence on their decision
towards capital market information. Respondents’ who dial and trade must be
alert and inform the brokers to buy, sell or hold on receipt of the market
information and there may arose a dilemma while taking decision as the broker
may interfere. There are more chances that market participants follow the herd
behaviour or hearsay and hunches. The present investigation enquires whether
the mode preferred determines the respondent’s reaction towards capital market
information.
Ho17: Mode preferred by the respondents does not determine their reaction
217
TABLE 5.39
Mode Preferred by the Respondents and Decision towards
Mode preferred
Market information Self on F value p value Result

Dial and
line Both
trade
trading
1.94 1.83 1.67
Bullish Market 1.940 0.146 Not Significant
(0.759) (0.685) (0.756)
1.65 1.58 1.83
(0.831) (0 659) (0.811)
Expected (0.872) (0.880) (0.732)
expectation (0.660) (0.747) (0.649)
2.02 1.75 2.25
Dividend announcement 5.412 0.005 Significant
(0.912) (0.799) (0.937)
1.94 1.81 2.00
Bonus announcement 0.986 0.374 Not Significant
(0.889) (0.912) (0.926)
2.21 1.89 2.33
Stock split announcement 6.624 0.002 Significant
(0.795) (0.846) (0.756)
2.17 1.86 1.92
News of merger 5.684 0.004 Significant
(0.729) (0.791) (0.874)
2.04 2.00 2.17
(0.786) (0.886) (0.811)
2.21 1.80 2.00
(0.771) (0.818) (0.828)

The table 5.39 depicts that the p value is less than 0.05 which is
significant in case of respondents reaction towards Results better than expected
(p = 0.005), Dividend announcement (p = 0.005), Stock split announcement
(p=0.002) and Expansion plans (p = 0.578). Hence the null hypothesis is rejected
in the above cases. As the ‘p’ value is greater than 0.05, null hypothesis is
accepted in case of Bullish market (p = 0.146), Bearish market (p = 0.215),
Results below expectation (p = 0.895), Bonus announcement (p = 0.374), News
of merger (p = 0.004) and Diversification plan (p = 0.000). So it can be
concluded that the mode preferred by the respondents whether it is direct online
trading or through dial and trade or both the pattern, the investor or trader
decisions are greatly influenced.
218
5.4.4 Investment Objectives
No person will act without any specific purpose or goal. Based on the
investment objectives the decision of buying, selling or holding the stock may
vary. Hence the survey has been dealt to find whether investment objectives of
the respondents determine their reaction towards Capital market information.
Ho18: Investment Objectives of the respondents does not determine their

reaction towards Capital market information.
TABLE 5.40
Investment Objectives of the Respondents and Decision towards
Investment Objectives
Market Capital Tax
Dividends Quick Capital Result
information appre- benefits F value p Value
/ Interest returns Security
ciation
2.07 1.68 1.92 2.11 2.33
(0.712) (0.778) (0.765) (0.892) (0.767)
1.43 1.66 1.719 1.56 2.00 Not
Bearish market 2.203 0.069
(0.737) (0.695) (0.846) (0.506) (0.840) Significant
Results better 2.14 1.96 1.92 1.56 2.33

than Expected (0.751) (0.901) (0.868) (0.847) (0.767)
Results below 2.14 1.96 2.29 1.78 2.50
expectation (0.647) (0.685) (0.615) (0.801) (0.514)
Dividend 2.43 1.85 2.04 1.56 1.83
announcement (0.831) (0.902) (0.846) (0.698) (0.924)
Bonus 2.29 1.85 1.92 1.44 2.00
announcement (0.805) (0.878) (0.915) (0.847) (1.029)
Stock split 2.21 2.06 2.29 1.78 2.00
announcement (0.871) (0.786) (0.795) (0.934) (0.840)
2.21 2.04 2.21 1.67 1.33
News of merger 7.096 0.000 Significant
(0.782) (0.801) (0.768) (0.480) (0.485)
2.29 2.06 2.04 1.67 1.83
Expansion plans 2.685 0.032 Significant
(0.708) (0.864) (0.795) (0.832) (0.707)
Diversification 2.14 1.80 2.38 2.00 2.33
plan (0.751) (0.795) (0.759) (0.832) (0.767)

The table 5.40 unfolds the fact that the p value is less than 0.05 which is
significant in case of respondents reaction towards Bullish market (p = 0.001),
Results better than expected (p = 0.024), Results below expectation (p = 0.000),
Dividend announcement (p = 0.000), Bonus announcement (p = 0.004), Stock
split announcement (p = 0.053), News of merger (p = 0.000), Diversification plan
219
(p = 0.000) and Expansion plans (p = 0.032). Hence the null hypothesis is
rejected in the above cases. As the ‘p’ value is greater than 0.05, null hypothesis
is accepted only in case of Bearish market (p = 0.069). So it can be concluded
that investment objectives play a dominant role in determining the decision on
receipt of capital market information.
5.4.5. Risk-Taking Attitude
Risk- taking attitude vary among the respondents’ and based on which
decision towards capital market information too vary from each other. The
influence of risk taking attitude of the respondents towards decision making on
capital market information is revealed in table 5.41.
Ho19: Risk- taking attitude of the respondents does not determine their reaction
TABLE 5.41
Risk Taking Attitude of the Respondents and decision towards
Risk taking attitude
Market information Risk F value p value Result
High Medium Low
averse
1.80 1.70 2.00 2.16
(0.701) (0.800) (0.831)) (0.804)
1.44 1.66 1.84 1.75
Bearish market 3.861 0.010 Significant
(0.592) (0 .763) (0.781) (0.792)
Results better than 1.99 1.93 2.04 2.21
Expected (0.907) (0.872) (0.914) (0.793)
Results below 1.93 2.12 2.09 2.08
expectation (0.632) (0.680) (0.611) (0.825)
Dividend 1.96 1.82 2.09 2.04
announcement (0.849) (0.905) (0.940) (0.852)
Bonus 1.86 1.82 2.11 1.89

announcement (0.896) (0.915) (0.928) (0.846)
Stock split 1.96 2.13 2.25 2.14
announcement (0.803) (0.908) (0.792) (0.699)
1.96 2.17 1.98 1.91
(0.803) (0..826) (0.726) (0.695)
2.09 1.98 1.96 2.16
(0.874) (0 .820) (0.830) (0.757)
1.91 2.20 1.88 2.05
( 0.860) (0.840) (0.715) (0.749)

220
The table 5.41, unfolds the fact that the risk taking attitude of the
respondents do not influence the decision of the respondents on the flow of
capital market information as the computed ‘p’ value is greater than 0.05 in
most of the cases. Hence the null hypothesis is accepted for Results better
than expected (p=0.840), Results below expectation (p = 0.087), Dividend
announcement (p = 0.254), Bonus announcement (p = 0.277), Stock split
announcement (p = 0.229) and News of merger (p = 0.144) whereas the ‘p’ value
is less than 0.05 and it is significant for Bullish market (p = 0.002), Bearish
market (p = 0.010) and Diversification plan (p = 0.034)and the null hypothesis is
rejected.
In a nut shell it can be concluded that investment profile of the

respondents have significant influence on the decision of the investors or traders
when the capital market information flows in and investors are continuously
monitoring the markets instead of depending on individual perceptions.
5.4.6 Adoption of SIP
Majority of the respondents are aware of the systematic investment plan

and they adopt this strategy and in such a situation whether the market news
affect their decision is the question. Hence an attempt has been made to test
whether adopting SIP by the respondents determine their reaction towards capital
market information using t-test.
Ho20: Adoption of SIP by the respondents does not determine their reaction
221
TABLE 5.42
Adoption of SIP by the Respondents and Decision towards
Adopt SIP
Market information F value p value Result
Yes No
2.02 1.73
(0.857) (0.713)
1.73 1.58
(0.731) (0.745)
1.96 1.96
Results better than Expected 0.142 0.706 Not Significant
(0.868) (0.879)
Results below 2.27 1.90

expectation (0.639) (0.689)
1.90 2.00
(0.875) (0.902)
1.65 2.13
Bonus announcement 3.903 0.049 Significant
(0.832) (0.902)
2.17 2.06
Stock split announcement 0.404 0.526 Not Significant
(0.802) (0.844)
2.08 1.98
(0.762) (0.799)
Expansion plans 2.17 1.92

(0.828) (0.808)
2.10 1.98
Diversification plan 0.001 0.971 Not Significant
(0.805) (0.823)

The table 5.42, reveals that adoption of SIP by the respondents does not
influence the decision of the respondents on the flow of capital market
information as the ‘p’ value is greater than 0.05 in most of the cases. Hence the
null hypothesis is accepted for Bearish market (p = 0.484) and Diversification
plan (p = 0.971), Results better than expected (p = 0.706), Results below
expectation (p = 0.578), Dividend announcement (p = 0.597), Stock split
announcement (p = 0.526) and News of merger (p = 0.574) whereas the ‘p’ value
is less than 0.05 and it is significant for Bullish market (p = 0.011) and Bonus
announcement (p = 0.049). So it can be concluded that in case of bear market the
respondents are not ready to adopt SIP.
222
In a nutshell it can be concluded that investment profile of the
respondents have significant influence on the decision of the investors or traders
when the capital market information flows in and investors are continuously
monitoring the markets instead of depending on individual perceptions.
5.5 INVESTORS LEVEL OF SATISFACTION TOWARDS SERVICES

OF SHARE BROKERS
In the secondary markets, transparency is ensured by introduction of

screen-based order matching system which makes the price and volume data
instantly available to an investor in the remotest corner of the country.
Intermediaries bridge the gap between investors and issuers in securities markets.
Therefore, the way intermediaries deal with their clients influences their trust and
willingness to carry out business in the market. In order to enhance the quality of
intermediaries, SEBI, apart from regulating their activities, has taken several
steps to ensure that intermediaries are adequately equipped, both in terms of
physical infrastructure as well as professionally qualified staff, to discharge their
responsibilities in a professional and cost-effective manner. Some of the steps by
SEBI in this regard are SEBI's encouragement for corporatization of the
brokerage industry, review of eligibility norms of intermediaries from time to
time, certification of persons associated with securities markets and so on.
A broker is an intermediary between buyers and sellers of securities. In the
primary market: the broker acts as underwriter-broker for new issue marketing-
lead manager-issue manager-merchant banker-portfolio manager-advisor/
consultant etc. In the secondary market, intermediaries or stock brokers act as
dealer, broker in the trading ring, financier for carry forward business, arbitrageur
in buying and selling as between the different markets, dealer in government
securities, bonds etc, adviser, financial consultant and portfolio manager. The
Broker charges brokerage to the clients after the purchase or sale and at the time
of passing the contract note. Brokerage may be charged depending upon the
volume of business and frequency of dealings by the client.
223
In the age of information technology, customers are not only fully aware
of their needs and requirements, expectations and information technology
enabled services but also maintaining day to day interaction with the different
kinds of service provider in their life for their own interest and getting their
services in various ways. In customers’ mind, every dimension of the service
quality for a particular service industry plays an important role about the quality
of services perceived by them and over time dimension wise, situation wise,
culture wise, nation wise, sector wise as well as industry wise the customers’
expectation about the quality of services varies where insurers’ perception of
customers’ service expectation is no exception to this.
5.5.1 Opinion about the Share Brokers
Service quality plays an important role in the customization process of

service delivery, improvement of the productivity and profitability of the
organizations as well as in the satisfaction process of the customers of the
organizations. Due to the effect of the several factors of the globalization,
customers’ socio-economic culture have already been changed and become very
much dependent on the information technology. Considering the various needs
and requirements of customers, brokers are now concerned in providing quality
of services to their customers in order to meet the expectations of the customers.
Clients are likely to evaluate service quality based on the total service provided
and how well the combined services meet their expectations. Satisfaction of the
clients comes only when their needs and wants are fulfilled. Almost every
company tries to provide quality of services to their clients in order to satisfy
them. As technology (IT) has become the backbone of the securities market the
intermediaries are now trying to get competitive advantage over their competitors
through the use of information technology and information technology enabled
services (ITES). To retain the clients the intermediaries or brokers are taking
strenuous efforts by arranging investors’ awareness program and even alert them
through messages during the upward trend and down trend of the stock market.
224
The share brokers are providing investment advice, market-leading
research and comprehensive broking services across a broad range of trading
products. The investors will be benefited only if there are limited procedure and
formalities. Due recognition and respect is expected by the respondents from the
intermediaries. Quick response, accurate information, excellent research reports
recommending whether to buy or avoid are other major expectations of the
respondents from the intermediaries. Their services are categorized as follows
i) Client Relationship Practices: Brokers retain their customers by sending SMS

after each transaction, sending monthly statement to the client and by charging
reasonable brokerage for each transaction. The immediate response from the
brokers is highly expected by the clients.
ii) Supervisory Support Practices: In this competitive world brokers can retain
his clients by giving suggestions in altering the portfolio, by sending investment
tips/trading tips for investors/traders and helping to overcome the market risks.
Clients expect due care of the brokers as it is rural area.
iii) Performance Appraisal Practices: Some brokers assure clients with

handsome returns and they guide them to do intraday or trade on behalf of the
traders. Unscrupulous brokers may trade in the clients account without his or her
knowledge which is dealt in the study to know whether the rural participants are
aware of such brokers.
iv) Training and Development Practices: It is the customary practice of the

brokers to arrange for any Investors program in order to clear the doubts if the
market participants and to bring awareness about the securities market.
Information regarding the market volatility is highly expected by the clients and
it is the duty of the brokers to guide them for a discipline trading and alert them
well in advance regarding the ups and downs of the market in future. Moreover
he must contact the clients regularly and clarify their doubts.
225
This section is an attempt to find out the investors’ perception about the
service of the intermediaries where in 12 statements are framed and respondents
opinion was received under likert five point scale as strongly agree /agree/neutral/
disagree/ strongly disagree and the collected data are categorized as Client
Relationship Practices, Supervisory Support Practices, Performance Appraisal
Practices, Training and Development Practices and the results are depicted in
table 5.43.
TABLE 5.43
Descriptive Variables- Services of Brokers
p value
Services of Brokers Mean SD t value Significant
(2-tailed)
Client Relationship Practices
Send SMS after each transaction 4.32 0.761 98.289 0.000
Send monthly statement of your portfolio 4.01 0.955 72.691 0.000
Brokerage charges- Reasonable 3.82 1.064 62.204 0.000
Supervisory Support Practices
Give Suggestions in altering your portfolio 3.55 1.082 56.811 0.000
Send investment tips for trading 3.66 0.994 63.787 0.000
Help you to overcome the market risks 3.47 1.074 55.974 0.000
Proxy Performance Practices
Guide you for Intraday 3.23 1.328 42.135 0.000
Trade on behalf of you 3.08 1.304 40.924 0.000
Trade in your account without your 2.89 1.266 39.533 0.000

knowledge
Training and Development Practices
Arranged for any Investors program 3.53 1.026 59.594 0.000
Inform you regarding the market volatility 3.87 0.850 78.434 0.000
Contact you regularly 3.96 0.949 72.243 0.000
Table 5.43 makes it clear that the mean value were high in respect of
Client relationship practices and services of brokers. It means that investors were
satisfied with the service of the brokers in case of client relationship practices
such as sending SMS after each transaction, sending monthly statement to the
226
client and by charging reasonable brokerage for each transaction. Client
relationship practice is followed by Training and development practices and
supervisory support practices of the brokers based on the mean value. It also
reveals that the respondents are satisfied with the training and development
practices and supervisory support practices of the brokers. The Proxy
performance practices of brokers have scored least mean score and it is proved
that the brokers are true and loyal to their clients. Brokers are not pestering their
clients to do intraday and they are not interfering or trading in their clients
account. No transaction is carried without the knowledge of the respondents.
The mean and standard deviation results supported the above said results.
It is suggested that the supervisory support practices of the brokers such

as giving suggestions in altering the portfolio, Sending tips for trading and
helping the clients to overcome the market risk can be concentrated as the mean
value and standard deviation results are quite low compared to client relationship
practices and Training and development practices. Further it can be concluded
that the services of the brokers is good and in line with the customer’s
expectations.
5.6 PROFIT BOOKING SITUATION
Only few investors create immense wealth from a stock market and also
manage to keep it for decades. These investors take the right decisions and for
doing this, one needs experience. But experience comes from bad decisions too.
Investors who create wealth from equity markets and keep it for decades, at times
for generations, do not panic when a market falls.4
Profit booking must be made when the portfolio is reasonably close to the
anticipation. Investors must practice to trade in a disciplined manner and must not
be greedy even if their portfolio exceeds their expectation instead they must learn
to quit as soon as the target is reached. Anutosh Bose, Chief operating officer of
4
Rajeev Jain, (2012) “Investor’s Attitude towards Secondary Market Equity Investments and
Influence of Behavioral Finance” International Journal on Emerging Technologies 3(2)
pp 67-79
227
LIC Nomura Mutual Fund in an interview to the Business line suggests the
investors to keep in mind three time horizons- short term, medium term and long
term based on the goals. Long term investment should be around seven to 10
years. Investors should monitor their portfolio at least once on a monthly basis
and profit should be booked as soon as the intended target performance is
achieved. Similarly non- performing investments also need corrective measures
based on the risk appetite. The portfolio should be reviewed and adjusted from
time-to-time in tune with the market conditions. Generally a structured 20%
saving over an average work life will help in accumulating a decent corpus.5
The investors’ perception towards securities market and the profit

booking situation is evaluated with the help of 14 statements in Likes five point
scale. Based on the response from the respondents, t-test for consistency is used
and the table 5.44 projects the mean score of the statements through which profit
booking level is equal to the average level is analyzed .
TABLE 5.44
Descriptive Variables - Profit Booking Situation
p value
S.No Statements Mean SD t value Significant
(2-tailed)
1. By investing in Equity Market 4.36 0.795 94.954 0.000
2. By trading in Put & Options 3.50 1.255 48.301 0.000

3. By doing Futures & Options 3.44 1.354 44.015 0.000
4. Under SIP 3.47 1.247 48.209 0.000
5. By doing Intra day 3.41 1.322 44.676 0.000
6. Selecting Blue chip companies 3.94 1.058 64.480 0.000
7. Selecting Mid cap stocks 3.77 1.000 65.284 0.000
8. Selecting Small cap stocks 3.55 1.163 52.881 0.000
9. Correct entry and Exit level 3.40 1.227 48.003 0.000
10. In the month of Jan, Feb, March 3.41 1.260 46.881 0.000
11. In the month of April, May, June 3.42 1.170 50.643 0.000
12. In the month of July, Aug, Sept 3.43 1.118 53.153 0.000
13. In the month of Oct, Nov, Dec 3.47 1.111 54.122 0.000
14. After attending training program 3.44 1.205 49.460 0.000
5
Anutosh Bose (2014), “It’s best to keep your bird in hand”, Business Line, 28th April, p3.
228
As per the above table, the mean perception of the total sample, which
ranges between 3.40 and 4.36, is in the opinion range (> = 3.40 and < 4.36), in
turn indicating that majority of the respondents in the sample have accepted all
the statements regarding profit booking from the securities market. Further from
the ordering of mean scores from high to low, it is clear that they book profit ‘By
investing in equities’ (Mean = 4.36 ) is a major breakthrough that most of the
respondents are investors where in the book profit by investing in cash market. It
is followed by ‘Selecting Blue chip companies’ (Mean = 3.94), ‘Selecting Mid
cap stocks’ (Mean = 3.77) and so on. As per investors profit booking procedure
the statement which have scored the least mean scores are ‘Correct entry and Exit
level’ (Mean = 3.40), In the month of Jan, Feb, March (Mean = 3.41)and ‘In the
month of April, May ,June’(Mean = 3.42).
Moreover, all the statements are significant and it is evident that the
respondents are able to time the market. Crucial decisions have been taken by the
traders while doing futures and options. Investing or quitting from a stock at the
right time at the right rate is a great task put forth in front of the investor and
trader which has been done successfully by the investors.
5.7 CHANGES IN LIFE STYLE
Success in investment is earning the highest possible return with the

constraints imposed by the investor’s personal circumstances—age, family needs,
liquidity, tax position and acceptability of risk. Performance should be measured
against alternative investments, or combinations of investments, available to the
investor within those constraints. Genuine success means winning the battle
against inflation, getting the real value of savings and capital and leading a calm
and peaceful life. Changes in the life style are categorized as planning to
contribute towards children’s future, able to plan for old age, clear debts if any,
lead a luxurious life and so on. The changes in life style of the respondents after
participating in the securities market is evaluated with the help of 15 statements
in Likerts five point scale and the changes in life style of the respondents are
anlaysed.
229
TABLE 5.45
Descriptive Variables-Changes in Life Style
p value
S.No Statements Mean S.D t value Significant
(2-tailed)
1. Total income has increased 3.77 1.153 56.571 0.000
2. Savings portion has increased 3.75 1.154 56.279 0.000
3. Able to plan for old age 3.39 1.159 50.678 0.000
4. Able to contribute for children's future 3.46 1.241 48.247 0.000
5. Able to lead a luxurious life 3.19 1.327 41.651 0.000
6. Able to contribute to family needs 3.42 1.250 47.394 0.000
7. Able to repay the debts 3.05 1.354 39.013 0.000
8. Personal contacts has increased 3.87 .914 73.316 0.000
9. Self Confidence has increased 3.72 1.100 58.607 0.000
10. Physical health has improved 3.37 1.280 45.599 0.000
11. Feel in secured 3.40 1.329 44.316 0.000
12. Freedom to think has enhanced 3.85 1.110 60.088 0.000
13. Tolerance level has improved 3.62 1.175 53.370 0.000
14. Clothing pattern has improved 3.43 1.368 43.429 0.000
15. Stress has increased 3.76 1.268 51.362 0.000
** Significant at 5% level
The above table 5.45, depicts that among the fifteen variables relating to
the changes in the life style of the investors, the mean score of the statement
‘Personal Personal contacts has increased’ is 3.87 which ranks first followed by
the statement ‘Freedom to think has enhanced’ with a mean score of 3.85.
Majority of the respondents feel that their ‘Total income has increased’ as its
mean score is 3.77 but at the same time the respondents conveyed that ‘Stress has
increased’ (Mean=3.76). ‘Able to repay the debts’ ranks last with a mean score
of 3.05. Many respondents are of the view that their Clothing pattern and life
style has changed to some extent as highest deviation (SD = 1.368) is found for
the above statement.
230
5.8 SUMMARY
It is crystal clear that every individual is different from others due to

various factors which include demographic factors, age, race and sex, education
level, social and economic background; same is the situation with the investors.
The most critical challenge faced by them is the investment decision, they act in a
rational manner and they follow their instincts and emotional biases. While
making investment decisions most of them are successful investors as they time
the market through their experience and experts advice. Investors depend on the
prompt and accurate information for making their investment decisions. In
absence of such information, their decision depends on hearsay and hunches or
they follow the herd behaviour. Moreover the life style of the respondents has
increased but not to a remarkable level.
231

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CHAPTER –FIVE

PERCEPTION OF INVESTORS ON POST- INVESTMENT

5.2 FACTORS INFLUENCING PORTFOLIO CONSTRUCTION

As Securities market is a nonstop national video game wherein every

2. Size of the company 3.99 1.111

3. Brand Name 3.68 1.209

8. Market share value-high 3.44 1.285

9. Satisfactory Dividend 3.53 1.377

Source: Primary Data

5.2.1 Factor Analysis and Data Reduction Variables

Another useful statistics is the Kaiser-Meyer-Oklin (KMO) test of

Approx. Chi-Square 3828.601

The sampling adequacy level is acceptable as the value of KMO statistic

As a first step to explain the statements considered for portfolio

1 3.547 14.779 14.779

2 2.676 11.151 25.930

3 2.615 10.896 36.827

4 2.499 10.414 47.241

5 2.407 10.030 57.270

6 1.868 7.785 65.056

7 1.479 6.161 71.217

Source: Primary Data

The principal component analysis is a multivariate technique for

Financial Statement .838

The most important factor influencing the portfolio construction of the

1. Financial Statement 0.838

The investors are cautious in analysing the financial statements, quarterly

F2 –Decision Making Analysis

The next important post- investment behavior of investors based on Eigen

1. Fundamental Analysis 0.727

F3 - Corporate Governance Analysis

F4 - Support Services Analysis

1. Recommendation of Analyst 0.768

1. Stock split 0.878

2. Geographical Location 0.761 10.030

3. Face value of share 0.757

Source: Primary Data

F6-Image building analysis

Past experience of the investors /traders enables them to identify the

FACTOR 1 Returns analysis Financial Statement 0.838

FACTOR 2 Decision making analysis Fundamental Analysis 0.727

FACTOR 3 Corporate Governance Analysis Ownership 0.791

FACTOR 6 Image building Analysis Past Experience 0.847

FACTOR 7 Goodwill Analysis Familiarity with the 0.851

5.2.3 Association of Demographic Profile and Investment analysis for

The association of demographic profile of the respondents and the

5.2.3.1 Age Group

Ho1: There is no significant association between the age group of the

Market positioning 2.00 b,c 2.12c 1.86a 1.70a

Source: Primary Data

Education plays a dominant role in investment analysis and hence the

Ho2: There is no significant association between the education of the

Goodwill 1.93 1.79 2.49 2.05 2.25

1.73 2.08 2.09 2.00 2.00 Not

Decision making 2.07 2.32 2.13 2.30 1.50

Corporate 1.93 1.87

Market 1.80 2.09

1.73 1.89 2.13 1.90 2.25

Support services 1.87 2.13 2.04 1.95 1.50

Source: Primary Data

Based on the occupation of the respondents, the investment analysis may

Ho3: There is no significant association between the occupation of the

1.82 1.81 2.22 2.58 1.92 2.38