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Limited Stock Investments in Pakistan

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Author(s): Fouzia Ali | Nabeela Shafeeq | Muhammad Ali

Journal: International Journal of Business and Management
ISSN 1833-3850

Volume: 7;
Issue: 4;
Date: 2012;
Original page

ABSTRACT
It has been observed that people are less prone to invest in the stock markets and this effect is more prominent indeveloping countries like Pakistan. It’s a common observation that people in Pakistan are more reluctant to buythe stocks of companies rather they think that it’s better to invest in the real estate, start a business, deposit inbank saving accounts, or to buy gold. The purpose of conducting this study is to find the reasons behind thisdiscouraged stockholdings in general public. A huge amount of literature had been reviewed to get a clear viewof this issue in different countries and a questionnaire had been designed to get primary data from the localrespondents to know their views about this limited stockholdings. It has been found that many demographiccharacteristics like age, gender, occupation, education and income have impact on the stockholdings. Awareness,financial literacy, social interaction, informational cost, participation cost and entry cost have also found to havean impact on the proportion of stockholdings. It is clear from the analysis that 65% of the respondents havenever bought stocks. Several reasons have been highlighted for this limited stockholdings pattern among theindividuals such as no money, lack of awareness and information about stock markets or investment in any otherform.

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