A survey of the influence of Behaviourial Factors on Investor activities at the Nairo bi Stock Exchange.

Abstract

The study set out to survey the influences of behaviourial factors on investor activities at the Nairobi Stock Exchange. It mainly implored the role played by behaviourial factors on investors' decisions. Behaviourial finance provided the fundamental theoretical framework for this study. To achieve this objective, primary and secondary data were used. Primary data was collected from individual and institutional investors who trade at the Nairobi Stock Exchange through questionnaires, while secondary data used are documented studies and other literature in behaviourial finance developed mostly in advanced markets. The results obtained suggest that the behaviour of investment market participants was to some extent irrational. However, the traditional investment influencing factors of risk and return are still having more influence on investor decisions than the behaviourial factors. The results may have been constrained by the small number of investors forming the research sample in comparison to total investors at the bourse. Larger sample respondents may have further enhanced the research findings. The response rate, especially of the institutional investors was also not satisfactory. Better response rate would have enhanced the research finding.