| dc.description.abstract | Sin stocks are of increased interest since more and more investors and fund managers
avoid them while integrating social screening with their investment decisions. As a
reflection of social norms, socially responsible investing has become a niche of its own
in determining investors’ portfolio decisions in the past decade.
The study adopted an explanatory research design with the population consisting of all
firms listen in the NSE. The sample of the study consisted of the top 20 NSE firms.
Coincidentally, there are two sin stocks in this index. Therefore, the study grouped 18
firms into the non sinstock category and another 2 firms (BAT ad EABL) into the
sinstock category. Secondary data used secondary data sources in gathering data for
analysis which was done using the Statistical Package for Social Sciences (SPSS version
20) to generate the descriptive statistics and also to generate inferential results. T-Tests
used to check whether the mean returns of Sin stock differ from the mean returns of non
sin stocks.
Results on the analysis of variance (ANOVA) indicate that the overall model was
significant as indicated by an F statistic of 4.904 and p value of 0.001. These results
imply that the independent variables namely gearing ratio, log of total assets and log of
profitability were satisfactory in comparing the returns of sinstocks and non sinstocks.
Regression analysis results showed that the relationship between return and gearing
ratio, size of the firm and profitability was positive which means that an increase in
either of them would lead to a positive increase in return. However the variables were
insignificant as there probability values were 0.178, 0.215 and 0.412 respectively which
indicates that the variables were not the key determinants of return. Further comparative
results, T-tests statistics indicate that sinstocks have higher capital gains, high expected
return and dividends than in nonsinstocks. The study provides recommendations to
investors who may want to choose on which stocks to invest in and to other researchers,
who may want to contribute to the continuous debate of sin stocks returns and non
sinstocks returns. Suggested area for further reading could one that compares the
majority group of investors in both sin and non sin stocks in Kenya. | en |
