The existence of a well-developed financial system is critical to the nation's economic growth. Capital, cash, and credit are made available as financial inputs. Through proper coordination of human resources and material inputs, the easy availability of financial inputs promotes the growth process. It will contribute to increased production of goods and services. The efficiency of the financial system is determined by the flow of funds in the economy and the channeling of these funds into productive activity for the nation's development. After the United States, India has the most listed companies. Global investors seek India as their preferred investment destination. Previously viewed with skepticism, the stock market now appeals to middle-class Indians as well. Many Indians working abroad are now investing their savings in stocks. In the current context, many people regard stock market investments as one of the best forms of investment when compared to traditional investment options such as banks, real estate, and gold, among others
The existence of a well-developed financial system is critical to the nation's economic growth. Capital, cash, and credit are made available as financial inputs. Through proper coordination of human resources and material inputs, the easy availability of financial inputs promotes the growth process. It will contribute to increased production of goods and services. The efficiency of the financial system is determined by the flow of funds in the economy and the channeling of these funds into productive activity for the nation's development. After the United States, India has the most listed companies. Global investors seek India as their preferred investment destination. Previously viewed with skepticism, the stock market now appeals to middle-class Indians as well. Many Indians working abroad are now investing their savings in stocks. In the current context, many people regard stock market investments as one of the best forms of investment when compared to traditional investment options such as banks, real estate, and gold, among others.
Despite the facts stated above, the majority of Indians are unaware of the stock market. They aren't even aware of how stock exchanges and the securities market work. In this context, the current study has been undertaken to highlight the level of awareness of the people in Bangalore city, as well as to assess their perception of the stock market, which are influencing them to stay away from the stock market, and also to highlight those factors which are influencing them positively to choose the stock market as their investment option over other investment avenues.
Review of Literature
Neel Kamal Purohit assesses the factors that influence investors' perceptions and attitudes toward the Indian stock market in Tamil Nadu. Singh and Chander (2004) attempted to assess investors' perceptions of mutual funds while also highlighting the reasons for fund withdrawals from mutual funds. Gopi and Ramayah (2007) attempted to highlight the factors that influence and affect the intention of investors to use online stock trading. According to Mukherjee, Bose, and Coondoo (2002), the primary focus should be on restoring investor confidence in the equity market in order to strengthen the market's domestic investor base, which could act as a built-in cushion against the potentially destabilizing effects of a sudden reversal of foreign inflows. Mittal M and Vyas R.K (2008) investigated the relationship between various demographic factors and investors' investment personalities. According to empirical evidence, factors such as income, education, and marital status influence an individual's investment decision. Szyska Adam (2008) examined how investors' psychology influences their perception of financial markets, discussed the implications of this new perspective on finance among capital market practitioners-investors and corporate policymakers, and concluded with some thoughts on the future development of capital market theory.
Talati and Sanghvi (2010) found that investors in Gujarat preferred to invest in government securities and fixed deposits of nationalised banks, where their funds were completely safe, despite receiving lower return. Bennet and Salvam (2010) conducted a study to examine investors' perceptions of the impact of SPERTEL (Social, Political, Economical, Regulatory, Technological, Environmental, and Legal) risks on the market. Except for the social factors between married and unmarried investors, as well as political, regulatory, and legal factors for age and occupation, they discovered that all other factors had insignificant influences on investors' perception. Nayaka and Nanjunda (2014) reveals that the corporate houses have started realized and recognized that they would have to look beyond the profitability aspect and take care of all the stakeholders those who connected with their endurance directly or else indirectly in the society. The degree of the financial reporting disclosure sophistication differs from organizational level (Nayaka and Gowda, 2014).
The above literature review reveals that little research has been conducted to identify the factors influencing people in Bangalore to invest in the capital market, and their perceptions have not been assessed. As a result, there is a need for the study to address these issues, and the current study has been undertaken with the objectives listed below.
Objectives of the study
Research Methodology
The study is being conducted to assess investors' perceptions of stock market investment. The data is gathered from both primary and secondary sources. Nayaka and Usman (2017) study focused to measure the perceptions of Financial Analyst (FA) and Retail Investors (RI) towards WBR usefulness backed by ease of use and in order to realize having computer literacy, financial literacy and web literacy. The study reveals that stratified random sampling was used, 252 companies were selected from BSE-500 and 8 groups were covered in these sample companies thus making the sample adequately representing the population (Nayaka and Gowda, 2017).
Primary data is collected using structured questionnaires from 379 respondents (47.2 percent male and 52.8 percent female) out of 384 sample size in Bangalore city using convincing sampling method because the total population of Bangalore city is more than 1,00,000 and sample size should be 384 according to Krejcie and Morgan's article titled 'Determination of sample size for research activities' (1970). The collected data was tabulated and presented in percentage tables. Chi-square analysis is a statistical tool used to test the study's hypothesis. Secondary information was gathered from books, journals, magazines, articles, and websites.
Data Analysis & Interpretation:
Table 1: Demographical factors
| Variable | Frequency (n=379) | Percentage (%) |
| Respondents' Age | ||
| 18-25 | 85 | 22.4 |
| 26-35 | 86 | 22.7 |
| 36-45 | 88 | 23.2 |
| Above 45 | 120 | 31.7 |
| Respondents' Gender | ||
| Male | 179 | 47.2 |
| Female | 200 | 52.8 |
| Respondents' qualification | ||
| Schooling | 87 | 23 |
| 12/10th | 98 | 25.9 |
| Graduate | 94 | 24.8 |
| Post graduate | 100 | 26.4 |
| Respondents’ Profession | ||
| Private company employee | 103 | 27.17 |
| Government employee | 91 | 24.01 |
| Students | 86 | 22.69 |
| House wife | 15 | 3.96 |
| Agriculturist | 21 | 5.54 |
| Businessman | 63 | 16.63 |
Source: Primary data
The demographic information of Bangalore city respondents is shown in table 1. The survey was completed by 52.8 percent of female respondents and 47.2 percent of male respondents. Only 22.4 percent of respondents are between the ages of 18 and 25. 31.7 percent of respondents are over the age of 45, and only 22.4 percent are between the ages of 18 and 25.
Table 2: Financial information of the investors
| Variable | Frequency (n=379) | Percentage (%) |
| Period of investment | ||
| Short term | 195 | 51.5 |
| Long term | 184 | 48.5 |
| Primary goal of investment | ||
| Children education | 107 | 28.2 |
| House | 80 | 21.1 |
| Tax benefit | 90 | 23.7 |
| Others | 102 | 26.9 |
| Savings towards investment | ||
| 10-25% | 91 | 24 |
| 25-40% | 98 | 25.9 |
| 40-55% | 101 | 26.6 |
| 55-80% | 89 | 23.5 |
| Factors considered before investing | ||
| Safety of investment principle | 133 | 35.1 |
| Opportunity for steady growth | 124 | 32.7 |
| Liquidity | 122 | 32.2 |
Source: Primary Source
The financial information of the survey participants was provided in the table 2. In Bangalore, 51.5 percent of respondents are investing in short-term investment avenues, while the remaining respondents are investing in long-term investment avenues. 28.2 percent of respondents invest the majority of their savings in investment avenues with the primary goal of providing children's education. 35.1 percent of respondents prioritise the investment principle of safety over other factors.
Table 3: Source of funds to invest in stock market
| Particulars | Frequency (n=379) | Percentage (%) |
| Savings | 167 | 44.1 |
| Borrowed fund | 212 | 55.9 |
Source: Primary Source
The data in Table 3 above show the sources of funds used to invest in the Bangalore capital market. Out of 100 percent, 92 percent use savings to invest/trade in the stock market, while the remaining 8 percent use pledging to invest/trade in the stock market.
Table 4: Sources of awareness about the capital market
| Gender | Awareness about the stock market | Total | ||||
| Broker | News paper | Internet information | Financial consultants | Others | ||
| Male | 33 | 31 | 32 | 44 | 39 | 179 |
| Female | 42 | 39 | 39 | 40 | 40 | 200 |
| Total | 75 | 70 | 71 | 84 | 79 | 379 |
| Percent | 19.8 | 18.5 | 18.7 | 22.2 | 20.8 | 100% |
Source: Primary Source
The data in table 4 above reveal the respondents' sources of information about the capital market. 19.8 percent of respondents obtain information from brokers, 18.5 percent obtain information from newspapers, 18.7 percent obtain information from the internet, 22.2 percent obtain information from financial consultants, and the remaining 20.8 percent obtain information from other sources.
Table 5: Source of knowledge to buying stocks
| Gender | Source of Knowledge | Total | ||||
| Over the internet | Through the mail | My own knowledge over stock market | Friends’ knowledge sharing | others | ||
| Male | 42 | 31 | 36 | 29 | 41 | 179 |
| Female | 39 | 47 | 45 | 29 | 40 | 200 |
| Total | 81 | 78 | 81 | 58 | 81 | 379 |
| Percent | 21.4 | 20.6 | 21.4 | 15.3 | 21.4 | 100% |
Source: Primary Source
The data in table 5 above reveals information about the buying habits of investors in Bangalore. 21.4 percent of respondents purchased stock over the internet, 20.6 percent purchased stock through the mail, 21.4 percent purchased stock based on their own knowledge of the stock market, 15.3 percent are influenced by their friends to buy shares in the market, and the remaining 21.4 percent have other sources of knowledge to purchase.
Table 6: Investors purchasing pattern in capital market
| Gender | Pattern of Investing in capital market | Total | ||
| Repeatedly invest / trade in the same set of stocks | Invest / trade in variety of stocks | Depends on market trends I will prefer stocks | ||
| Male | 56 | 65 | 58 | 179 |
| Female | 62 | 69 | 69 | 200 |
| Total | 118 | 134 | 127 | 379 |
| Percent (%) | 31.1 | 35.4 | 33.5 | 100 .00 |
Source: Primary Source
The data in Table 6 shows the capital market investors' investment purchasing patterns. 31.1 percent of respondents invest/trade in the same set of stocks regularly, 35.4 percent invest/trade in a variety of stocks, and the remaining 33.5 percent invest/trade in other stocks.
Table 7: Opinion on the situation when both the market and share price are falling
| Gender | Opinion | Total | ||
| Sell it all | Sell part of investment | Hold - neither buy nor sell | ||
| Male | 56 | 65 | 58 | 179 |
| Female | 62 | 69 | 69 | 200 |
| Total | 118 | 134 | 127 | 379 |
| Percent | 31 | 35 | 34 | 100 % |
Source: Primary Source
According to table 7, if the stock market falls continuously and by 20%, 31 percent of respondents sell all of their stocks, 35 percent sell a portion of their investment, and the remaining 34 percent hold their stocks, i.e. neither buy nor sell.
Table 8: Respondents’- monitoring investment
| Gender | Monitoring | Total | ||
| Daily | Monthly | Occasionally | ||
| Male | 50 | 58 | 71 | 179 |
| Female | 63 | 66 | 71 | 200 |
| Total | 113 | 124 | 142 | 379 |
| Percent | 29.81 | 32.7 | 37.47 | 100 % |
Source: Primary Source
It is evident from Table 8, 29.81 percent of respondents monitor their investments daily, 32.7 percent monitor monthly, and the remaining 37.47 percent monitor their investments occasionally.
H0: all demographical & financial variables and perception of the investors towards the stock market are not statistically dependent
H1: all demographical & financial variables and perception of the investors towards the stock market are statistically dependent
Table 9: Tests of Hypothesis Investigating the relationship between the Demographical & Financial Variables and Perception about investment in Stock market
| Hypothesis no. | Variables | Chi-square value | df | p-value |
| 1 | Gender vs perception towards stock market | 4.377 | 2 | 0.112 |
| 2 | Age vs perception towards stock market | 2.167 | 6 | 0.904 |
| 3 | Education vs perception towards stock market | 3.037 | 6 | 0.804 |
| 4 | Profession vs perception towards stock market | 5.320 | 10 | 0.869 |
| 5 | Investment objectives vs perception towards stock market | 4.584 | 6 | 0.598 |
| 6 | Saving Percent vs Perception towards stock market | 3.55 | 6 | 0.802 |
| 7 | Factors influencing to invest vs perception towards stock market | 1.161 | 4 | 0.885 |
| 8 | Source of Knowledge vs perception towards stock market | 14.973 | 8 | 0.060 |
| 9 | Awareness vs perception towards stock market | 14.026 | 8 | 0.081 |
| 10 | Investment pattern vs perception towards stock market | 7.028 | 4 | 0.134 |
| 11 | Decision when market/share price is low vs perception towards stock market | 9.028 | 4 | 0.264 |
@ 0.05 percent level of significance
According to the current study, the majority of people have investment plans, and the majority of them are satisfied with their investment options. Nonetheless, 24 percent of respondents invest less than 25% of their savings. Brokers/agents/financial advisors have an opportunity to encourage the people of Bangalore to increase their level of savings toward investment and make the best use of the opportunities available in the capital market. Furthermore, they should maintain constant contact with existing and prospective clients in order to attract more investment to the capital market. Government agencies or SEBI should educate more youngsters through their awareness programmes by reaching both rural and urban college students and making them prominent future investors as youth will earn handsome money and they will have age on their side to invest and even they do not hesitate to take risk and invest in the capital market. To attract our country's young generation to the capital market, brokerage firms should run appealing schemes that encourage young people to invest a large portion of their savings in the market.
Future researchers may expand the scope of the study to replicate it in different environments and geographical locations, as well as to investigate other factors that influence stock market attitudes with a broader range of population and a higher representativeness sampling method. This study can be generalised to Bangalore, but it cannot be generalised to other metro cities with different quality of life and approaches.
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