FACTORS INFLUENCING INVESTMENT DECISIONS IN NAIROBI SECURITIES EXCHANGE: A CASE OF DYER & BLAIR INVESTMENT BANK LIMITED
Kamuti Josphat Mweu - Master’s of Business Administration, Jomo Kenyatta University of Agriculture and Technology, Kenya
Dr. Jane Omwenga - Lecturer, Jomo Kenyatta University of Agriculture and Technology, Kenya
ABSTRACT
Investment in stocks involves two types of markets; the primary and secondary markets. A primary market is a financial market in which new issues of securities are sold initially by the corporation while a secondary market is a financial market in which securities that have been previously issued can be .The Security exchange market is a secondary market in which already issued shares are bought and sold. Stock exchange market is important as it provides a ready market for those who want to buy and those who want to sell thus making financial instruments liquid. The market publishes useful information in statistical and summary form about various companies for guidance. It keeps an eye on the financial affairs of every company whose shares are bought and sold through it. In Kenya the only organized stock market is the Nairobi Security exchange (NSE.) This study looked at four variables including financial conditions of the listed companies and how it influences investment decision at Nairobi security exchange. Secondly, the study examined the influence of Investors disposable income on investment decisions. The study further examined effects of Market information as well as education level of investors on investment decision at Nairobi Security exchange. The findings of this study are intended to help investment firms and brokers in the stock exchange to understand the unique characteristics of the customers that affect their day to day transactions and also be in a position to plan for them accordingly. In addition, the Nairobi Securities Exchange shall benefit greatly as they will understand the less explored markets and be able to provide resources for creating awareness on how different market niches can gain access to various securities traded in the stock exchange. Finally, the study shall explore the various aspects of the capital markets that will enrich business students with the understanding of the functioning of the stock market. Data was collected using self-administered questionnaires which were hand dropped at dyer & Blare investment Bank for filling. A total of 75 respondents were picked from a population of 150 which included both employees of the Bank and individual investors. Descriptive statistics was used where data was coded and then analyzed using charts and tables. The study found that effect of listed Firms financial statements conditions had a positive effect on investment decision making at NSE. There was a positive correlation between market information and investors’ investment decision making. This has come as a result of NSE making market information online for easy accessibility by the investors. Availability of market information is playing a central role in investors’ decision making at NSE. With the country ICT platform going a notch higher, investors can access the needed information on real time and this facilitates investment decision making. A big number of the respondents were for the opinion that most of investors at NSE have knowledge in security market. Some of them have the knowledge as a result of academic qualifications as well as having interest in learning about investment in securities. The study recommends that listed companies at NSE should annually publish their financial statements publicly in order to attract more investors. Investors should give priority to investment at NSE instead of struggling to safe for future which is not practically realistic. Market information works well for both existing and prominent investors. It is recommendable to the investment companies to be availing market information to the public all the time. Individual companies listed at NSE should create more awareness to the market. This will enhance market growth of securities and derivatives as people with idle funds will find a good place to invest them.