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  • International Journal of Advanced Research in Management (IJARM), ISSN 0976 – 6324 (Print), ISSN 0976 – 6332 (Online), Volume 4, Issue 3, September - December 2013 © IAEME 1 INVESTORS’ AWARENESS ABOUT CAPITAL MARKET INVESTMENTS: A STUDY WITH SPECIAL REFERENCE TO KARNATAKA STATE Dr. SHIVAKUMAR DEENE, Prof. SATYANARAYAN PATHI Assistant Professor, Dept. of Commerce, School of Business Studies, Central University of Karnataka-Gulbarga (Karnataka-India) Dept. of Business Management, Brahampur University, Brahampur, Odhisa. ABSTRACT The present study is an attempt on studying investors’ awareness about capital market investments and the level of satisfaction on the information published by the different stakeholders in Karnataka state. A total of 425 sample respondents were selected from 4 divisions of Karnataka. viz.viz Gulburga (107), Bangalore (106), Belgaum (106) and Mysore (106) divisions. The respondents were administered a structured questionnaire developed specifically for the purpose. The data collected thus were analysed both by descriptive and inferential statistics like chi-square test. Results revealed that majority of the sample selected had moderate to extensive level of knowledge on investment. They had maximum awareness regarding shares and real estate and very less knowledge on Stock/Index Futures, Stock/Index Options, ETF, and ULIP. It is argued that though the Indian Financial System has been modernised 2 plus decades ago , still the market has not grown up to the desired level , as far as attracting the small individual investors are concerned and winning the confidence of the investors are concerned in the wake of continuous financial turmoil. There is a clear-cut dearth of investors’ awareness programmes in India in general and Karnataka state in particular. As the educational level of the respondents increased, their knowledge and awareness increased linearly and significantly. This is clearly documented in the form of above dialogue. The investors who are having more technical knowledge about the market were more passionate about the securities market and invest in on ongoing basis. Strategies for improving investment options have been discussed. INTERNATIONAL JOURNAL OF ADVANCED RESEARCH IN MANAGEMENT (IJARM) ISSN 0976 - 6324 (Print) ISSN 0976 - 6332 (Online) Volume 4, Issue 3, September - December 2013, pp. 01-17 © IAEME: www.iaeme.com/ijarm.asp Journal Impact Factor (2013): 4.7271 (Calculated by GISI) www.jifactor.com IJARM © I A E M E
  • International Journal of Advanced Research in Management (IJARM), ISSN 0976 – 6324 (Print), ISSN 0976 – 6332 (Online), Volume 4, Issue 3, September - December 2013 © IAEME 2 INTRODUCTION The economic growth of any country, in other words, majorly depends upon its ability to mobilise the capital at a right time and make it available to the right investment for its effective utilisation. The capital mobilisation task in India is rightly shouldered upon the Indian Financial System, which comprises within its fold the financial markets and their supporting institutions. The important financial markets, which exist in India, are the Treasury Bills market, Call Money market, Commercial Bills market, Mortgages market, Foreign Exchange market, Government Securities market and the Industrial Securities market which go hand in hand to inject the funds from saver to the investor in a more appropriate and economical manner without any discrimination. India with its more than 100 cr. of population could have enjoyed the pulling-up of vast capital mobilisation, but it still failed to do so and is being ranked after USA and Japan, as far as attracting the small individual investors are concerned. The importance of giving priority to these individual investors is that, they are having more than what they spend and this is quite opposite, if we consider the corporate entities. In this precious juncture documented above, the concerned stakeholders, be it whether the government agencies or private agencies have to do a lot to convince, attract and moreover making aware about the investments nuts and bolts, so that the small individual investors can park their excess fund in the economy, which in turns, generates the value on what they spend and also economy too can grow. The present paper is an attempt in this direction, which tries to identify the awareness of the small individual investors with regard to their knowledge about the industrial securities market and the level of satisfaction on the same and also tried to establish the association between the important factors affecting the investment decisions. OBJECTIVES OF THE STUDY • To examine various sources of investment information and adequacy of the disclosure made therein. • To study the awareness of the sample respondents with regard to the various investment avenues. • To assess the factors affecting their investment knowledge. HYPOTHESIS OF THE STUDY Following hypothesis have been developed for the purpose of this study: H1: There is an association between the education of the respondents and the level of knowledge of the respondents’. H2: There is an association between the experience of the respondents and the awareness of about different investment avenues. THE SOURCES OF DATA The data required for the study was collected from primary and secondary sources. The research work being an empirical study based on the primary data. The information on the investors’ sources of information and the awareness about the same has been collected
  • International Journal of Advanced Research in Management (IJARM), ISSN 0976 – 6324 (Print), ISSN 0976 – 6332 (Online), Volume 4, Issue 3, September - December 2013 © IAEME 3 through a structured questionnaire. The secondary data has also included the information obtained from the records and files of the Bangalore Stock Exchange Limited. Secondary data was also used to support the theoretical and statistical background required to build up the tempo of the research and the major secondary data has been sourced from the Journals, Business Magazines, the Internet, Published Doctoral Theses, Dissertations and Business News Papers etc. this was being used for literature support in accomplishing the data mining towards completion of the study. ANALYSIS OF DATA For the present study chi-square tests were applied to verify the significance of difference of response frequencies and in addition to test the association of variables under study contingency of coefficient was used using SPSS for windows (version 21.0). TIME SPAN The study was conducted to understand the different strategies and perception of individual investors in the State of Karnataka and covers a period from January 2012 through December 2013. SAMPLE RESPONDENTS To make the study more appropriate, effective and useful it goes without saying that, the size of the sample selected for executing the study should be ideal and should contain all the attributes of the population. In a study of this kind involving large population with diverse features made the selection of sample bit difficult, but still to make the study more relevant, an appropriate method of sampling namely stratified random sampling was used, since this is an appropriate method providing the appropriate sample size for the study representing all the districts in Karnataka State and to make the study acceptable a sample of around 425 units were used{As per the theory of Krejcie, Robert V. and Daryle W Morgan) which stipulates that any sample size selected beyond 384 is having all probability of repeating the same behavior/attitude with similar features from across the population. But whilst selecting the sample population, instead of 384, 425 samples were being chosen, giving 10 per cent as a margin of lapses.} While selecting sample small investors proper representation was given to factors like age, income, education, and occupation etc. to make the sample representative of the population more apposite. PROPOSED RESEARCH SAMPLE AREA Area sampling method was employed to select the sample respondents from the state of Karnataka and the entire state of Karnataka was being classified into four divisions, keeping in mind the proper representations of the entire geography viz, The Gulbarga Division, Bangalore Division, Belgaum Division and finally as Mysore Division. And thereafter the convenience sampling method was being used to locate the small individual investors in these four divisions, so as to fulfil the pre determined quota in respective division mentioned below. View slide
  • International Journal of Advanced Research in Management (IJARM), ISSN 0976 – 6324 (Print), ISSN 0976 – 6332 (Online), Volume 4, Issue 3, September - December 2013 © IAEME 4 SAMPLE UNITS Divisions No. Respondents Gulbarga Division 107 Bangalore Division 106 Belgaum Division 106 Mysore Division 106 DATA ANALYSIS AND INTERPRETATION The analysis has been presented in three sections viz Section one deals with demographic information, section two deals association between respondents’ education and awareness about various investment avenues and the final section-III deals with the respondents’ experience and awareness about various investment avenues followed by the summary of findings and suggestions Section - I DEMOGRAPHIC PROFILE OF THE RESPONDENTS The discussion given below under the title of “Demographic Profile of the Respondents”, deals with the basic information related to the sample respondents to familiarise with the ground realities of the respondents. Table 1 Distribution of the sample by gender and age, occupation, experience and income Demographic variable Sub variable GENDER Total Male Female Age groups (in years) 20-25 Frequency 72 77 149 Percent 23.5% 65.3% 35.1% 26-30 Frequency 101 23 124 Percent 32.9% 19.5% 29.2% 31-35 Frequency 52 8 60 Percent 16.9% 6.8% 14.1% 36-40 Frequency 38 6 44 Percent 12.4% 5.1% 10.4% 41-45 Frequency 12 2 14 Percent 3.9% 1.7% 3.3% above 45 Frequency 32 2 34 Percent 10.4% 1.7% 8.0% Occupation Business Frequency 81 7 88 Percent 26.4% 5.9% 20.7% Govt. service Frequency 38 19 57 Percent 12.4% 16.1% 13.4% Pvt. service Frequency 175 66 241 Percent 57.0% 55.9% 56.7% Others Frequency 13 26 39 Percent 4.2% 22.0% 9.2% Experience ( in years) <2 Frequency 72 68 140 Percent 23.5% 57.6% 32.9% 2-5 Frequency 103 30 133 View slide
  • International Journal of Advanced Research in Management (IJARM), ISSN 0976 – 6324 (Print), ISSN 0976 – 6332 (Online), Volume 4, Issue 3, September - December 2013 © IAEME 5 (Source: Filed Survey) From the above table it is strongly clear that, young India i,e the age group falling between 20-25 is dominating the market with 35.1% (that too with 72 male and 77 female investors out of 425 respondents), followed by the age group of 26-30 with 29.2 % and it keeps on decreasing with the higher age. The last phase is being tapped by the age group of above 45 with the least percentage of 8. This is a clear-cut message to the market leaders to focus upon the young India with innovative ideas. It is undoubtedly clear from the table no.1 placed above that, the Pvt. Service individual investors are drumming the market under study with a share of 56.7% (57.0 male investors and 55.9% female investors) , followed by business people, who stood second in the list by securing 20.7% of share in the survey of 425 small investors in the Karnataka State. The table above clearly says that, the respondents under study with less than two years of experience have shown more interest in the capital market and stood first in the survey by securing 32.9 % share out of 425 respondents, and the respondents with two to five years of experience have also shown moderate response by standing second in the list under study with 31.3 % percent. The above table pinpoints that, the respondents middle in the race has dominated the capital market and enjoyed the position of first rank among the surveyed respondents by occupying 45.6 % of share in the survey of 425 respondents and they were falling in the income group of between 1-2 lakhs a year. This is very genuinely followed by the income group of 2-5 lakhs a year by sharing a 43.3.% of share in the total survey. Table2 Level of Investment Knowledge Sl.No. Level of Knowledge Frequency Percent 1. Little 80 18.8 2. Some 84 19.8 3. Moderate 214 50.4 4. Good 30 7.1 5. Extensive 17 4.0 6. Total 425 100.0 Test statistics: X2 = 286.07; P=.000 (Source: Filed Survey) Percent 33.6% 25.4% 31.3% 5-10 Frequency 86 14 100 Percent 28.0% 11.9% 23.5% 10+ Frequency 46 6 52 Percent 15.0% 5.1% 12.2% Income (in lakhs) <1 Frequency 27 19 46 Percent 8.8% 16.1% 10.8% 1-2 Frequency 145 49 194 Percent 47.2% 41.5% 45.6% 2-5 Frequency 134 50 184 Percent 43.6% 42.4% 43.3% 5 lakhs and above Frequency 1 0 1 Percent .3% .0% .2%
  • International Journal of Advanced Research in Management (IJARM), ISSN 0976 – 6324 (Print), ISSN 0976 – 6332 (Online), Volume 4, Issue 3, September - December 2013 © IAEME 6 The respondents are being enquired about their knowledge about the capital market by giving different options before them and most of them clearly said that, they are having moderate knowledge about the capital market and stand first in the list with 50.4% in the list. This is followed by the other groups by saying some (19.8 %) and little (18.8 %). One of the interesting fact revealed from the study is, there are very few respondents, who quoted by saying, they have good and extensive knowledge about the market. The chi-square test is applied to these groups of frequencies and it is divulged that, there is a significant difference between variables under study (X2 = 286.07; P=.000) and the market leaders have to do a lot to feed the knowledge by taking various training session to the investors and by conducting various investors awareness programmes. Table 3 Awareness about various investment instruments Sl.No. Investment Instruments Frequency Percent Chi- Square 1. Shares 425 100 - 2. Stock/Index Futures 64 15.1 207.551 3. Stock/Index Options 70 16.5 191.118 4. ETF 43 10.1 270.402 5. SIP/ULIP 85 20.0 153.000 6. Real Estate 425 100 - 7. Commodities 108 25.4 102.779 (Source: Filed Survey) The above table under study document the fact that, all the investors are very much aware about the share market as well as of real estate investment and these two options have placed first rank in the awareness list, followed by the commodities market, wherein out of 425 chosen respondents, 108 respondents have said that, the are aware with the commodities market and landed in the second rank in the list. The chi-square is being measured at X2 =102.779 for commodities market. The list is followed by other investment instruments namely SIP/ULIP , Stock/Index Options, Stock/Index Futures and ETF and the chi-square of all these are rightly placed against its percentage in the table above. Table 4 Mode of information about investment Sl.No. Type Frequency Percent 1. In person 192 45.2 2. By mail 86 20.2 3. By e-mail 109 25.6 4. Posted on a website, with a notification that is available 27 6.4 5. Others 11 2.6 6. Total 425 100.00 Test statistics: X2 245.482;P=.000 (Source: Filed Survey)
  • International Journal of Advanced Research in Management (IJARM), ISSN 0976 – 6324 (Print), ISSN 0976 – 6332 (Online), Volume 4, Issue 3, September - December 2013 © IAEME 7 Reliability presents things in a different angle and the same holds true in the table presented above. When we encountered with all the respondents by enquiring what mode of information about the investment is being preferred them. Most of them clearly agreed that, they prefer in person with 45.2 % out of the 425 respondents. This is followed by their next preference of by email, which stands second place having 25.6 % of share in the survey. The third is dominated by mail (20.2 %), followed by Posted on a website information (6.4 %) and others (2.6 %) respectively. The above analysis definitely fuel to the thinking that, most of the investors are preferred to depend upon the primary source than that of the secondary sources, so that the qualms could be cleared instantly. The Chi-Square test is applied to know the differences among these variables and it was revealed by the test that, there is a significant difference among the variables and judged statistically as X2= 245.482; P=.000. Table 5 Sources of Investment Information Sl.No. Sources of Information Frequency Percent 1. Annual Reports 128 30.1 2. Advertisement of Public Issues 65 15.3 3. Prospectus 44 10.4 4. Interim Financial Results 23 5.4 5. New Issues Analysis 44 10.4 6. Share Price Quotations 44 10.4 7. Brochures, Pamphlets and Newsletters 77 18.1 8. Total 425 100.0 Test statistics: X2 116.471;P=.000 (Source: Filed Survey) The table mentioned above come-up with the sources of information that the investors are needed to take-up the investment decisions. Out of the 425, 128 respondents with 30.1 % clearly agreed that, they are in need of annual reports as a source of information and ranked first in the list under survey. The second rank is landed in the form of Brouchers, Pamphlets and Newsletters published by the company in particulars and other stakeholders in general by scoring 18 % in the survey out of 425 respondents. And the stories continued for different stakes with different percentage and finally end-up with and ranked as last preferred source of information was Interim Financial Results with only 5.4 %. This is a clear-cut indication that, the investors does not believe the interim reports in the form of a proper forecaster of future. The zeal to know more in detail specifically the relationship among the given variables, the chi-square test is applied and its is proved by the results that, there is a significant difference among the variables under study by way of valuing the X2 =116.471;P=.000 .
  • International Journal of Advanced Research in Management (IJARM), ISSN 0976 – 6324 (Print), ISSN 0976 – 6332 (Online), Volume 4, Issue 3, September - December 2013 © IAEME 8 Table 6 Compatibility of Information to understand Sl.No. Kind Frequency Percent 1. Very easy 51 12.0 2. Easy 61 14.4 3. Somewhat easy 65 15.3 4. Not too easy 123 28.9 5. Not at all easy 78 18.4 6. Complex to understand 47 11.1 7. Total 425 100.0 Test statistics: X2 54.562;P=.000 (Source: Filed Survey) Proper understandings of the things make a different in life and this holds good here also. The above table titled as ‘Compatibility of Information to understand’ clearly deals with the level of understanding about the fed investment information and its affect on the investment decisions. It is lucid from the table presented above that, most of investors opined the information given to them is not too easy to understand and scored 28.9 % in the survey, followed by the not at all easy to understand which stands second in the survey by scoring 18.4% . And only 11.1 % investors opined that the information given to them is complex to understand. When we applied chi-square test to know the association between the variables, it is clearly present by the fact of chi-square value that, there is a significant difference between the frequencies under study. Table 7 Level of satisfaction on financial periodicals Sl.NO. Particulars HS S CS NS HD Chi-Square a) Coverage of latest developments 17 (4.0) 44 (10.4) 65 (15.3) 129 (30.4) 170 (40.0) X2 186.659; P=.000 b) Analysis of new issues 30 (7.1) 44 (10.4) 52 (12.2) 171 (40.2) 128 (30.1) X2 176.941; P=.000 c) Investment advice Nil (.00) 62 (14.6) 86 (20.2) 129 (30.4) 148 (34.8) X2 43.565; P=.000 d) Market whispers 21 (4.9) 44 (10.4) 146 (34.4) 129 (30.4) 85 (20.0) X2 ;134.51; P=.000 e) Analysis of share prices 48 (11.3) 35 (8.2 ) 86 (20.2) 192 (45.2) 64 (15.1) X2 185.412; P=.000 f) Report on companies Nil (.00) 39 (9.2) 86 (20.2) 109 (25.6) 191 (44.9) X2 114.096; P=.000 g) Highlighting investor grievances 16 (3.8) 150 (35.3) 109 (25.6) 65 (15.3) 85 (20.0) X2 117.200; P=.000 h) Review of annual reports 37 (8.7) 109 (25.6) 86 (20.2) 150 (35.3) 43 (10.1) X2 104.353; P=.000 i) Planning personal investment portfolio 101 (23.8) 86 (20.2) 109 (25.6) 95 (22.4) 34 (8.0) X2 41.576; P=.000 j) Report on industries 57 (13.4) 109 (25.6) 65 (15.3) 109 (25.6) 85 (20.0) X2 27.482; P=.000 (Source: Filed Survey) Note: HS-Highly satisfied, S-satisfied, CS-Can’t say, NS-Not satisfied, HD-Highly dissatisfied
  • International Journal of Advanced Research in Management (IJARM), ISSN 0976 – 6324 (Print), ISSN 0976 – 6332 (Online), Volume 4, Issue 3, September - December 2013 © IAEME 9 When we enquired, to know about the level of satisfaction the information published by the different financial periodicals on the various aspects covered by it. 40.0 per cent respondents out of 425, clearly said that, they are highly dissatisfied with the Coverage of latest developments and it measured in terms of chi-square as X2 =186.659;P=.000. This highly dissatisfaction is continued for different aspects as well namely, Analysis of new issues, Investment advice, Report on companies by having a score of 30.1 per cent , 34.8 per cent and 44.9 per cent respectively and chi-square for these variables measured as X2 =176.941;P=.000, X2 =43.565;P=.000 and X2 =43.565;P=.000 respectively. Out of the 425 respondents 146 (34.4 %) said, the level of satisfaction in terms of Market whispers is cannot say. As far as the level of satisfaction on the analysis of share price is concerned, it is said that, most of the respondents i.e., 192 (45.2 %) are not satisfied with the coverage. Highlighting investor grievances by the periodicals is secured 35.3 per cent and said they are satisfied with the coverage. In case of the periodicals Review of annual reports, it is rightly said that, 109 respondents out of 425 have satisfied the review of annual reports published by the companies. Investor’s satisfaction on planning personal investment portfolio by the periodicals are highly satisfied and given a share of 23.8 per cent. In fine, the investors’ satisfaction on report on industries by the periodicals is satisfied and given 25.6 per cent share. The chi-square of among all these groups of frequencies is placed against the figures and the results of the same say that, there is a significant relationship between these groups of frequencies. Table 8 Level of Satisfaction on Investment Information and Advice (Source: Filed Survey) When the investors were asked about the level of satisfaction on investment information and advice, most of them have agreed that, they are satisfied with the stock brokers’ investment information and advice by capturing a score of 30.4 %. 35.8 % of the total respondents said that, they are satisfied with the sub-brokers information and advice. And the previous stories continued for investment advisers counselling and prospectus & annual reports and news papers and periodicals by favouring by the most of the investors. But, in case of interim results out of 425 respondents, 172 respondents said that, they are not satisfied with the interim results. Chi-sqaure test revealed a significant difference between Sl. No. Source Level of Satisfaction Chi-Square NAS NS IND S VMS 1. Stock brokers 36 (8.5) 109 (25.6) 66 15.5) 129 (30.4) 85 (20.0) X2 62.047; P=.000 2. Sub-brokers 78 (18.40 66 (15.5) 86 (20.0) 152 (35.8) 43 (10.1) X2 78.400; P=.000 3. Investment advisers counselling 36 (8.5) 66 (15.5) 86 (20.2) 129 (30.4) 108 (25.4) X2 61.506; P=.000 4. Prospectus and annual reports 10 (2.4) 69 (16.2) 66 (15.5) 152 (35.8) 128 (30.1) X2 148.000; P=.000 5. Interim results 86 (20.2) 172 (40.5) 147 (34.6) 14 (3.3) 6 (1.4) X2 =267.012; P=.000 6. News papers and periodicals 8 (1.9) 27 (6.4) 66 (15.5) 173 (40.7) 151 (35.5) X2 255.929; P=.000
  • International Journal of Advanced Research in Management (IJARM), ISSN 0976 – 6324 (Print), ISSN 0976 – 6332 (Online), Volume 4, Issue 3, September - December 2013 © IAEME 10 these groups of frequencies of responses for Stock brokers (X2 62.047;P=.000), Sub-brokers (X2 78.400;P=.000), Investment advisers counselling (X2 61.506;P=.000), Prospectus and annual reports (X2 148.000;P=.000), Interim results (X2 174.918;P=.000) and for News papers and periodicals (X2 255.929;P=.000). Table 9 Adequacy of information furnished while making an investment decision Sl.N o. Particulars NA IA LA Suf Chi-Square 1. About risks and potential returns associated with the investment 41 (9.6) 66 (15.5) 275 (64.7) 43 (10.1) X2 360.986; P=.000 2. About any conflict of interest your advisor or the firm they work 6 (1.4) 34 (8.0) 320 (75.3) 65 (15.3) X2 589.748; P=.000 3. About the fees charges on the investment, or whether there is a penalty if you sell it quickly or before maturity? 3 (7.0) 175 (41.2) 213 (50.1) 34 (8.0) X2 301.202; P=.000 (Source: Filed Survey) When it was enquired to know the level of adequacy of the information furnished to them. Most of them clearly opined that, the information about risks and potential returns associated with the investment were little adequate and gave a response of 64.7%. 75.3 % of them have also agreed that, there was a little adequate information about any conflict of interest your advisor or the firm they work. And when we enquired about the adequacy of information about the fees charges on the investment, or whether there is a penalty if you sell it quickly or before maturity? 50.1 of them said they were given little information about this. The chi-square test was applied to know the difference between these groups of frequencies of responses and it was revealed that , there is a significant difference between these groups of frequencies and the chi-square is measured at X2 360.986;P=.000, X2 589.748;P=.000 and X2 301.202;P=.000 respectively. Table 10 Desired source of information on Risk and Return (Source: Filed Survey) It is tried to know the desired source of information on risk and return by the investors with the help of a question. 44.0 % of them said they are desired to get the information related risk and return from the advisor and this is systematically followed by the regulatory body (30.4 %) and the advisor’s firm (25.6%) respectively. The chi-square test revealed that, there is a significant difference between these group of frequencies and valued at X2 =23.172; P=.000. Sl.No. Kind Frequency Percent 1. Advisor 187 44.0 2. The advisor’s firm 109 25.6 3. A regulatory body 129 30.4 4. Total 425 100.0 Test statistics: X2 23.172;P=.000
  • International Journal of Advanced Research in Management (IJARM), ISSN 0976 – 6324 (Print), ISSN 0976 – 6332 (Online), Volume 4, Issue 3, September - December 2013 © IAEME 11 Section –II ASSOCIATION BETWEEN RESPONDENTS EDUCATION VS LEVEL OF INVESTMENT KNOWLEDGE After going through a detailed analysis of Demographic Factors table-wise, it is decided to test the association between those important factors responsible for influencing the small individual investors in the Karnataka State. The following analysis is an attempt in this direction, to give a clear-cut idea about the different parameters and their effects. Table 11 Respondents’ Education Vs Level of Investment Knowledge Knowledge Educational level Total Below graduation Graduation Post Graduation Higher (Ph.D and others) Little F 12 60 8 0 80 % 80.0% 24.5% 5.1% .0% 18.8% Some F 1 68 15 0 84 % 6.7% 27.8% 9.6% .0% 19.8% Moderate F 1 112 100 1 214 % 6.7% 45.7% 63.7% 12.5% 50.4% Good F 1 2 24 3 30 % 6.7% .8% 15.3% 37.5% 7.1% Extensive F 0 3 10 4 17 % .0% 1.2% 6.4% 50.0% 4.0% Total F 15 245 157 8 425 % 100.0% 100.0% 100.0% 100.0% 100.0% Test statistics CC=.539; P=.000 (Source: Filed Survey) A significant association was observed between respondent’s educational level and their knowledge regarding investment. When these two variables were subjected to cross tabulation and tested for their association, contingency coefficient value of .539 was found to be significant at .000 level. In other words, respondent’s education had direct influence over
  • International Journal of Advanced Research in Management (IJARM), ISSN 0976 – 6324 (Print), ISSN 0976 – 6332 (Online), Volume 4, Issue 3, September - December 2013 © IAEME 12 their knowledge on investment. From the table it is evident that as the educational level increased knowledge level regarding investment also increased linearly and significantly. Those with below graduation had little knowledge (80.0%) and graduates and post graduates had moderate knowledge (45.7% and 63.7% respectively) and those with higher degrees had extensive knowledge (50.0%). Table 12 Respondents’ Education Vs Desired Mode of Information about Investment Mode of information Educational Level Total Bel grad Grad PG Higher person Frequency 9 108 75 0 192 Percent 60.0% 44.1% 47.8% .0% 45.2% mail Frequency 3 39 43 1 86 Percent 20.0% 15.9% 27.4% 12.5% 20.2% email Frequency 1 93 14 1 109 Percent 6.7% 38.0% 8.9% 12.5% 25.6% website Frequency 1 2 20 4 27 Percent 6.7% .8% 12.7% 50.0% 6.4% others Frequency 1 3 5 2 11 Percent 6.7% 1.2% 3.2% 25.0% 2.6% Total Frequency 15 245 157 8 425 Percent 100.0% 100.0% 100.0% 100.0% 100.0% Test statistics CC=.453; P=.000 (Source: Filed Survey) There exists a significant association between respondents’ level of education and their desired level of information. When these two variables were subjected to cross tabulation and tested for their association, the contingency coefficient value of .453 was found to be significant at .000 level. In other words, the respondents’ education had a direct influence over their desired level of information. It can be seen from the above landed table that, increase in the level of education leads to change in the form of desired information i.e. when the respondents’ are graduation and above graduation they are preferring in person information on the investment and in case of below the graduation, they are preferring other sources of information for their investment decisions like mail, email, website etc.
  • International Journal of Advanced Research in Management (IJARM), ISSN 0976 – 6324 (Print), ISSN 0976 – 6332 (Online), Volume 4, Issue 3, September - December 2013 © IAEME 13 Table 13 Respondents’ Education Vs their level of Awareness about the Investment Instruments Instruments Educational Level (EL) Total Test StatisticsBel grad Grad PG Higher Shares Yes F 140 133 100 52 425 - % 100.0% 100.0% 100.0% 100.0% 100.0% SIF Yes F 1 6 51 6 64 CC=.420; P=.000 % 6.7% 2.4% 32.5% 75.0% 15.1% No F 14 239 106 2 361 % 93.3% 97.6% 67.5% 25.0% 84.9% Total F 15 245 157 8 425 % 100.0% 100.0% 100.0% 100.0% 100.0% SIO Yes F 2 13 50 5 70 CC=.356; P=.000 % 13.3% 5.3% 31.8% 62.5% 16.5% No F 13 232 107 3 355 % 86.7% 94.7% 68.2% 37.5% 83.5% Total F 15 245 157 8 425 % 100.0% 100.0% 100.0% 100.0% 100.0% ETF Yes F 1 3 35 4 43 CC=.355; P=.000 % 6.7% 1.2% 22.3% 50.0% 10.1% No F 14 242 122 4 382 % 93.3% 98.8% 77.7% 50.0% 89.9% Total F 15 245 157 8 425 % 100.0% 100.0% 100.0% 100.0% 100.0% SIPULIP Yes F 1 40 39 5 85 CC=.185; P=.000 % 6.7% 16.3% 24.8% 62.5% 20.0% No F 14 205 118 3 340 % 93.3% 83.7% 75.2% 37.5% 80.0% Total F 15 245 157 8 425 % 100.0% 100.0% 100.0% 100.0% 100.0% Real Estate Yes F 140 133 100 52 425 -% 100.0% 100.0% 100.0% 100.0% 100.0% Total F 140 133 100 52 425 % 100.0% 100.0% 100.0% 100.0% 100.0% Commodities Market Yes F 4 60 38 6 108 CC=.156; P=.000 % 26.7% 24.5% 24.2% 75.0% 25.4% No F 11 185 119 2 317 % 73.3% 75.5% 75.8% 25.0% 74.6% Total F 15 245 157 8 425 % 100.0% 100.0% 100.0% 100.0% 100.0% (Source: Filed Survey) A significant association is being observed between the education level and the awareness about the different investment avenues. When these to variables were put to test for their association by applying contingency of coefficient, the value found was .420 to be significant at .000 for education of the respondents and the awareness of SIF. The same association was found for all other investment avenues viz SIO, ETF,SIP/ULIP and
  • International Journal of Advanced Research in Management (IJARM), ISSN 0976 – 6324 (Print), ISSN 0976 – 6332 (Online), Volume 4, Issue 3, September - December 2013 © IAEME 14 commodities market, the contingency of coefficient among these individual instruments and educational level were calculated and rightly placed against the name by titling as test statistics, which clearly found the linear and significant association between the education of the respondents’ and the awareness of these instruments. Table 14 Respondents’ Education Vs Compatibility of Information to understand Compatibility Educational Level (EL) Total Bel grad Grad PG Higher very easy Frequency 1 27 20 3 51 Percent 6.7% 11.0% 12.7% 37.5% 12.0% Easy Frequency 3 8 48 2 61 Percent 20.0% 3.3% 30.6% 25.0% 14.4% Some what easy Frequency 0 20 43 2 65 Percent .0% 8.2% 27.4% 25.0% 15.3% Not easy Frequency 1 88 33 1 123 Percent 6.7% 35.9% 21.0% 12.5% 28.9% Not at all easy Frequency 1 70 7 0 78 Percent 6.7% 28.6% 4.5% .0% 18.4% Complex Frequency 9 32 6 0 47 Percent 60.0% 13.1% 3.8% .0% 11.1% Total Frequency 15 245 157 8 425 Percent 100.0% 100.0% 100.0% 100.0% 100.0% Test Statistics CC=.531; P=.000. (Source: Filed Survey) It is evident from the table documented above that, the educational level has a greater influence over the compatibility of the investors. When these two variables viz education and compatibility are cross-tabulated, so as to test their association by using contingency of coefficient, it is cleared from the resulted yielded in terms of contingency of coefficient as .531 to be significant at .000 i.e, there exists a linear and significant association between these two variables and the same can be seen in the above table as higher the education level, the greater will be the things to understand and if the respondents’ are lagging behind by education , the things will be tougher to understand.
  • International Journal of Advanced Research in Management (IJARM), ISSN 0976 – 6324 (Print), ISSN 0976 – 6332 (Online), Volume 4, Issue 3, September - December 2013 © IAEME 15 Section –III RESPONDENTS’ EXPERIENCE VS THEIR LEVEL OF AWARENESS ABOUT THE INVESTMENT INSTRUMENTS Table 15 Respondents’ Experience Vs their level of Awareness about the Investment Instruments Instruments Experience Total Test statistics <2 2-5 5-10 10+ Shares Yes F 140 133 100 52 425 - % 100.0% 100.0% 100.0% 100.0% 100.0% SIF Yes F 4 4 25 31 64 CC=.469; P=.000 % 2.9% 3.0% 25.0% 59.6% 15.1% No F 136 129 75 21 361 % 97.1% 97.0% 75.0% 40.4% 84.9% SIO Yes F 6 7 19 38 70 CC=.509; P=.000 % 4.3% 5.3% 19.0% 73.1% 16.5% No F 134 126 81 14 355 % 95.7% 94.7% 81.0% 26.9% 83.5% ETF Yes F 4 5 16 18 43 CC=.331; P=.000% 2.9% 3.8% 16.0% 34.6% 10.1% No F 136 128 84 34 382 % 97.1% 96.2% 84.0% 65.4% 89.9% SIP/ULIP Yes F 7 9 40 29 85 CC=.438; P=.000 % 5.0% 6.8% 40.0% 55.8% 20.0% No F 133 124 60 23 340 % 95.0% 93.2% 60.0% 44.2% 80.0% Real Estate Yes F 140 133 100 52 425 -% 100.0% 100.0% 100.0% 100.0% 100.0% Commodities Market Yes F 7 23 48 30 108 CC=.420; P=.000 % 5.0% 17.3% 48.0% 57.7% 25.4% No F 133 110 52 22 317 % 95.0% 82.7% 52.0% 42.3% 74.6% Total F 140 133 100 52 425 % 100.0% 100.0% 100.0% 100.0% 100.0% (Source: Filed Survey) Here with the help of the above presented table, it is being tried to locate the association between the respondents’ experiences and the awareness about the different financial avenues. In case of the awareness of the shares, the entire sample respondents’ have rightly said that, they are aware with this instrument and the same pictured was captured for real estate also. But in case of SIF,SIO, ETF, SIP/ULIP and commodity instruments , all of them are not aware with these above mentioned instruments and only few sample respondents have said that, they are aware with these instruments. To assess the association between these two i.e. between the experience and the awareness about the available individual instruments,
  • International Journal of Advanced Research in Management (IJARM), ISSN 0976 – 6324 (Print), ISSN 0976 – 6332 (Online), Volume 4, Issue 3, September - December 2013 © IAEME 16 a test of association namely contingency of coefficient was applied to know the association between the two variables under study and the value found in case of Experience Vs SIF is CC=.469 to be significant at .000, in case of Experience Vs SIO it is CC=.469 to be significant at.000, in terms of Experience Vs ETF , it is CC=.331 to be significant at.000, in the words of Experience Vs SIP/ULIP is CC=.438 to be significant at.000, in case of Experience Vs Commodities market , it is CC=.420 to be significant at.000. This clearly speaks about the direct linear and significant association between the experience and the awareness about the various individual investment avenues. To put it in a simple term, the experience had a direct influence over the awareness level of the sample respondents and any positive change in the experience will put the same positive impact on the awareness level of the sample respondents and vice-versa. DISCUSSION MAIN FINDINGS • Though the Indian Financial System has been modernised 2 plus decades ago , still the market has not grown up to the desired level , as far as attracting the small individual investors are concerned and winning the confidence of the investors are concerned in the wake of continuous financial turmoil. • There is a clear-cut dearth of investors’ awareness programmes in India in general and Karnataka state in particular. • The Education matters a more for small individual investors. This is clearly documented in the form of above dialogue. The investors who are having more technical knowledge about the market i.e. B.Com. and M.B.A , they are more passionate about the securities market and invest in on ongoing basis. • The above case can also be seen in the people having more and more experience about the market and they are attached with the market in the form of investors. Both the hypotheses 1 and 2 are accepted as we found that there is an association between the education of the respondents and the level of knowledge of the respondents’ and there is also an association between the experience of the respondents and the awareness of about different investment avenues. An in-depth analysis of the whole picture presented above divulges that, the small individual investors’ awareness level and the knowledge level varies with different education groups and with different experience groups. As the tables discussed above say that, the respondents’ with the lack of technical education about the securities market were reluctant to park their savings in the market and vice-a-vice the small individual investors with less number of experience also unwilling to park their hard earned money in the securities market. If we take the whole India in a single instance, the major portion is dominated by the different educational groups & investors with different experience and that too, people with traditional thinking grumping the market. The only way to attracting these small investors towards the securities market and getting the maximum benefit out of it is, educating the people concerned about the capital market as a whole and its surrounding climates. In this line, the capital market regulators, specifically SEBI with the help of other counterpart officials must conduct an awareness campaign at national level, state level and also at regional level on ongoing basis, so as to inject the awareness campaign bounded with confidence, inspirations, market pictures, mechanisms available to safeguard the small individual investors i.e. how to
  • International Journal of Advanced Research in Management (IJARM), ISSN 0976 – 6324 (Print), ISSN 0976 – 6332 (Online), Volume 4, Issue 3, September - December 2013 © IAEME 17 approach, when to approach and whom to approach etc. Then only the mindset of the small individual investors can be changed to a greater extent, so as to enable the market to tap-up the untapped saving of the individuals. REFERENCES 1. Financial Markets and Services by Gordon and Natarajan published by Himalya Publishing House. 2. The Indian Financial System and Financial Market Operation by Vasant Desai published by Himalya Publishing House. 3. Ronald C. Sprecher: Introduction to Investment Management- Houghton Mifflin Company, Boston, 1975, Page No.4. 4. Donal E. Fischer and Ronald J. Jordan: Security Analysis and Portfolio Management- Prentice-Hall of India Pvt. Ltd., New Delhi. 1992, Page No. 2. 5. Laxman Saroop: Towards A Vibrant Capital Market- The Indian Journal of Commerce, September 1991, Vol. XLIV, Part III, No. 168, Page No. 85. 6. Gupta, L.C.: Indian Shareowners- A Survey- Society for Capital Market Research and Development, Delhi, 1991, Page No.31. 7. Siddaiah,T.: Stock Markets under Securities Scam- An Analytical Review-Fortune India, January 1-15,1993, Vol.XI, No. 5, Page No. 52. 8. Dr. K. Rakesh and Mr. V S M Srinivas, “Understanding Individual Investors Investment Behavior in Mutual Funds (A Study on Investors of North Coastal Andhra Pradesh)”, International Journal of Management (IJM), Volume 4, Issue 3, 2013, pp. 185 - 198, ISSN Print: 0976-6502, ISSN Online: 0976-6510. 9. Dr. Narayan Baser, Dr. Mamta Brahmbhatt, Jay Talati & Riddhi Sanghavi, “An Analytical Study on Investors’ Awareness and Perception Towards the Hedge Funds in Gujarat”, International Journal of Advanced Research in Management (IJARM), Volume 3, Issue 1, 2012, pp. 1 - 10”. ISSN Print: 0976 – 6324, ISSN Online: 0976 – 6332. 10. Dr. Shivakumar Deene and Dr. Satyanarayan Pathi, “Investment Strategies and Motivational Factors among Small Investors: A Study with Special Reference to Karnataka State”, International Journal of Management (IJM), Volume 4, Issue 4, 2013, pp. 34 - 48, ISSN Print: 0976-6502, ISSN Online: 0976-6510.