An Inquiry Into the Investors' Preferences in Capital Market Investment with Special Reference to Tiruchirappalli – District

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An Inquiry Into the Investors' Preferences in Capital Market Investment with Special Reference to Tiruchirappalli – District AN INQUIRY INTO THE INVESTORS' PREFERENCES IN CAPITAL MARKET INVESTMENT WITH SPECIAL REFERENCE TO TIRUCHIRAPPALLI – DISTRICT Dissertation submitted to the BHARATHIDASAN UNIVERSITY, TIRUCHIRAPPALLI in partial fulfillment of the requirements for the award of the degree of DOCTOR OF PHILOSOPHY IN COMMERCE By J. MICHAEL SAMMANASU (Ref.No.4187 / PhD / Comm / PT / April’03) Under the guidance of Dr.G.JOHN, M.Com., B.Ed., M.Phil., PGDCA., Ph.D., PG AND RESEARCH DEPARTMENT OF COMMERCE St. JOSEPH’S COLLEGE (Autonomous) Nationally Re-accredited with A+ Grade College with Potential for Excellence TIRUCHIRAPPALLI - 620 002, INDIA APRIL 2010 Department of Commerce Dr. G. John St. Joseph’s College M.Com., B.Ed., M.Phil., Tiruchirappalli – 620 002. PGDCA., Ph.D., Ph : 0431 – 42266391 (O) Reader in Commerce E-mail:[email protected] CERTIFICATE This is to certify that the thesis entitled “AN INQUIRY INTO THE INVESTORS’ PREFERENCES IN CAPITAL MARKET INVESTMENT WITH SPECIAL REFERENCE TO TIRUCHIRAPPALLI – DISTRICT” submitted by J. MICHAEL SAMMANASU, M.B.A., M.Com., M.Ed., M.Phil., is a bonafide record of research work done by him under my guidance in the Department of Commerce, St. Joseph’s College (Autonomous), Tiruchirappalli and that the thesis has not previously formed the basis for the award of any Degree, Diploma, Associateship, Fellowship or any other similar titles. The thesis represents the independent work on the part of the candidate. Tiruchirappalli – 2 Dr. G. JOHN April 25, 2010 Research Supervisor DECLARATION I hereby declare that the work presented in the thesis entitled “AN INQUIRY INTO THE INVESTORS’ PREFERENCES IN CAPITAL MARKET INVESTMENT WITH SPECIAL REFERENCE TO TIRUCHIRAPPALLI – DISTRICT” has been originally carried out by me independently under the guidance and supervision of Dr. G. John, Reader in Commerce, St. Joseph’s College, Tiruchirappalli. This work has not been submitted either in whole or in part for any other Degree or Diploma at any University or Research institute. Tiruchirappalli – 2 J. MICHAEL SAMMANASU April 25, 2010 ACKNOWLEDGEMENT This thesis work has attained the concluding stage after the itinerant of a long distance. As it is true even this voyage had a proper boulevard to pass through. Various supervisors and guides laid this boulevard for the safe journey. It is the time now to recall each and every one for acknowledging their painful efforts and valuable guidelines. It is true that a research work cannot reach the excellence as expected, without the proper supervision. I express my profound gratitude to my Research Guide, Dr. G. John, M.Com., B.Ed., M.Phil., PGDCA., Ph.D., Department of Commerce, St. Joseph’s College, Tiruchirappalli – 2 for his guidance and valuable advice throughout the study. I wish to express my unconditional gratitude to Rev. Dr.R.Rajarathinam, Principal, St Joseph’s College, Tiruchirappalli for lengthening his support at any required time. I wish to express my deep sense of gratitude and indebtedness to Rev. Dr. Antony A. Pappuraj SJ, M.Com., M.Phil., Ph.D., Director, St. Joseph’s Institute of Management, St. Joseph’s College, Tiruchirappalli – 2 for his valuable advice and for the fine tuning of the thesis. I also thank all the staff members in the Department of Management Studies (JIM) for their help in completing this work. I specially express my sincere thanks to the Doctoral Committee members Rev. Dr. (Sr) Sarguna Mary, Principal, Holy Cross College and Dr. D. Joseph Anbarasu, Reader in Commerce, Bishop Heber College for their co-operation and support all through my Ph.D. work. I convey my thanks to Dr. Stephen Vincent G, M.Sc., M.Phil., PGDBA., PGDCA., Ph.D., Reader in Statistics, St. Joseph’s College, for his efficient application of SPSS tools. I also thank Dr. Shanmuga Vadivel, M.Sc., M.Phil., Ph.D., Reader in Statistics, for his efficient work in preparing and finalising the Interview Schedule. My special thanks are due to Rev. Fr. M. Arockia Samy SJ, my Mentor for his constant encouragement and the blessings. I also remember my parents S.M. Joseph, J. Packiam and my family members for their prayers and wishes. I express my gratitude to my wife M. Josephine Masilla Crecentia and to my sons M. Jerald Joel Ambrose, M. Johan Kingsly for their affectionate encouragement. I am grateful to the officials of the Securities and Exchange Board of India, Regional Office, Chennai and Coimbatore Stock exchange for the valuable information and advice provided to me. Similarly I thank the Share brokers and mutual funds agents for providing me with the lists of investors and for their suggestions. I am deeply indebted to the investors for their co-operation and their willingness to provide me with useful data required for the study. Michael Sammanasu J CONTENTS CHAPTER PAGE TITLE NO. NO. I METHODOLOGY OF THE STUDY 1 II REVIEW OF LITERATURE 10 III PROFILE OF THE STUDY AREA AND TE 79 SAMPLE OF INVESTORS IV ANALYSIS AND INTERPRETATION OF 99 DATA V SUMMARY OF FINDINGS, CONCLUSION 241 AND SUGGESTIONS BIBLIOGRAPHY QUESTIONNAIRE LIST OF TABLES TABLE PAGE TITLE NO. NO. 2.1 Market Participants in Securities Markets 32 2.2 Dependence on Securities Market 37 2.3 Distribution of Beneficial Accounts at NSDL 39 2.4 Resource mobilisation from the primary market 45 2.5 Unit holding pattern of mutual funds Industry 50 2.6 Assets under management of MFs 51 2.7 Secondary Market – Select Indicators 52 2.8 Growth and distribution of turnover on stock exchanges 58 2.9 Growth of dematerialization 59 2.11 Securities transaction tax 63 2.13 Regulations, Guidelines and Schemes issued by SEBI 69 3.1 Personal Profile of Respondents 92 3.2 Sex 93 3.3 Marital Status 94 3.4 Education 95 3.5 Occupation 96 3.6 Annual Income 97 3.7 Annual Savings 98 4.1.01 The Annual Savings of Investors in Financial Assets 100 4.1.02 Analysis of variance the annual savings of Investors in 100 financial assets 4.1.03 Average Annual Savings in Financial Assets 101 4.1.04 Average Annual Savings in Capital Market Instruments 104 4.1.4A Comparative Assessment of income and savings 106 4.1.05 Distribution of Investors According to Experience in the 108 Capital Market 4.1.06 Distribution of Investors Actively Investing in Shares 110 4.1.07 Distribution of Investors Actively Investing in Debentures 112 4.1.08 Distribution of Investors Actively Investing in Mutual Fund 113 Schemes 4.1.09 Level of Diversification in Shares 114 4.1.10 Level of Diversification in Debentures 116 4.1.11 Level of Diversification in Mutual Fund Schemes 117 4.1.12 Size of Investment in Shares 119 4.1.13 Size of Investment in Debentures 120 4.1.14 Size of Investment in Mutual Fund Schemes 121 4.1.15 Opinion of Investors about Future Investment in Capital 122 Market 4.1.16 Investment options preferred in Future 125 4.1.17 Factors Hindering capital market Investment 126 4.1.18 Rank Correlation Coefficient of Factors Hindering Capital 127 Market Investment 4.1.19 Mode of Investment Preferred by Investors 128 4.1.20 Investment Criteria in the Primary Market 131 4.1.21 Rank Correlation Coefficient of Investment Criteria in the 133 Primary Market 4.1.22 Investment Criteria in the Secondary Market 135 4.1.23 Rank Correlation Coefficient of Investment Criteria in the 138 Secondary Market 4.1.24 Motives Behind Capital Market Investment 139 4.1.25 Factors Considered before Investing in Company Shares 141 4.1.26 Rank Correlation Coefficient of Factors Considered for 142 Investing in Company Shares 4.1.27 Method of Secondary Market Operations Preferred by 144 Investors 4.1.28 Factors Influencing Choice of Mutual Fund Scheme 147 4.1.29 Type of Mutual Fund Schemes Preferred by Investors 150 4.2.01 Education wise Distribution of Investors According to 153 Period of Active Investment in Shares 4.2.02 Education wise Distribution of Investors According to Level 155 of Diversification in Shares 4.2.03 Education wise Distribution of Invest According to Size of 157 Investment in Shares 4.2.04 Education wise Distribution of Investors According to their 158 Future Investment Plan 4.2.05 Education wise Distribution of Future Investment Options 159 4.2.06 Education wise Distribution of Factors Hindering Investment 160 in Capital Market 4.2.07 Education wise Distribution of Investors According to Mode 161 of Investment 4.2.08 Education wise Distribution of Investment Criteria in the 163 Primary Market 4.2.09 Education wise Distribution of Investment Criteria in the 164 Secondary Market 4.2.10 Education wise Distribution of Investment Motives 166 4.2.11 Education wise Distribution of Factors Considered for 167 Investment in Shares 4.2.12 Education wise distribution of investors according to their 170 mode of operations in the secondary market 4.2.13 Occupation wise Distribution of Investors According to 171 Period of Investment in Shares 4.2.14 Occupation wise Distribution of Investors According to 173 Level of Diversification in Shares 4.2.15 Occupation wise Distribution of Investors According to Size 174 of Investment in Shares 4.2.16 Occupation wise Distribution of Investors According to their 176 Future Investment Plan 4.2.17 Occupation wise Distribution of Future Investment Option 177 of Investors 4.2.18 Occupation wise Distribution of Factors Investment in 178 Capital Market 4.2.19 Occupation wise Distribution of Investors According to 179 Mode of Investment 4.2.20 Occupation wise Distribution of Investment Criteria in the 180 Primary Market 4.2.21 Occupation wise Distribution of Investment Criteria in the 182 Secondary Market 4.2.22 Occupation wise Distribution of Investment
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