FACTORS AFFECTING INVESTMENT OF INDIVIDUAL INVESTOR’S IN NEPALESE STOCK MARKET

Abstract

The objective of the study is to examine and analyze the preferences of the Nepalese investors in selecting securities. This study tried to examine market preferred by investors to trade in security market, analyze the securities preferred by investors to buy and sell in security market and analyze the factor affecting investment decision of investors. In this study the major portions of analysis and interpretation have been done on set of questionnaires that are filled by the target investors' and only seven financial instruments have been taken into consideration for the study (i.e. Commercial Banks, Development Banks, Finance, Insurance, Manufacturing, Hydropower and Other)). To achieve the objective of this research, descriptive and casual research design has been used. The regression analysis on dependent variable (investment decision) and one or more independent variables i.e. Company Factors (CF), Risk and Returns Related Factors (RRF) and Market Factors (MF) is analyzed in SPSS software. It is observed that investors are more interested to invest in primary market and secondary market both. It is found that more than 50 percent investor’s in Nepalese stock market are serious about the company’s performance analysis before making investment decision. This study revealed that there is positive relation of market factors, risk and return related factors and company factors on the investment decision of individual investors. The regression analysis found that company factors have significant positive effect on investment decision. Similarly, market factors also have significant positive effect on investment decision. Likewise, risk and return related factors have significant positive effect on investment decision of individual investors in Nepalese stock market. The main conclusion of the study is that the Nepalese investor makes investment decision observing the company factor and market factor of Nepalese companies. Keywords: Company Factors, Risk and Returns Related Factors, Market Factors and Investment Decision