IS PAKISTAN NOT FOR INDIVIDUAL INVESTORS?

(A Study on KSE)
Submitted to:

Dr Nadeem A Syed

Supervisor:

Mr. Syed Babar Ali

Submitted by:

Shireen Mazhar
(07-0092)

PROGRAM
BACHELORS OF BUSINESS ADMINISTRATION (BBA)
SPRING 2011
National University of Computer & Emerging Science
Management Science Department, Karachi

FAST SCHOOL OF BUSINESS, KARACHI

Recommendation for External Examination

The final year project, here to attached, titled, Is Pakistan not for Individual Investors?
(A study on KSE) prepared and submitted by Shireen Mazhar, in partial fulfillment of
the requirements for the degree of Bachelors of Business Administration (BBA), is here
by forwarded for appropriation action.

_____________________
Mr. Syed Babar Ali
Advisor

i2

FAST SCHOOL OF BUSINESS, KARACHI

Certificate of Completion

The final year project titled, , Is Pakistan not for Individual Investors? (A study on
KSE), prepared and submitted by Shireen Mazhar, in partial fulfillment of the
requirements for the degree of Bachelors of Business Administration (BBA), has been
accepted and approved.

__________________________
Mr. Syed Babar Ali
Advisor

__________________________
Dr. Nadeem A. Syed
Head of Management Science Department

3ii

ACKNOWLEDGEMENT
All praises and thanks are for Almighty ALLAH who is the source of knowledge and
wisdom endowed to mankind and to the humanity as a whole. I take immense pleasure in
thanking my project advisor Mr. Syed Babar Ali for having permitted me to carry out this
research work and also for his guidance and useful suggestions throughout the research,
which helped me in completing the research work, on time. He has given all his precious
time to go through the research and make necessary correction as and when needed.

The encouragement and assistance of our parents, friends and people who have
contributed to this research are gratefully acknowledged. I would also thank Head of
Department Mr. Nadeem A. Syed and one of my faculty members Mr. Amjad without
whom this final year project would have been unattainable.

Table of Contents
Executive Summary...8
Chapter 1................................................................................................
1. Introduction.....................................................................................
1.1 Overview of Topic..................................................................................10
1.2 Historical background...........................................................................10
1.2.1 Stock Exchanges of Pakistan.....................................................................11
1.2.2 Stock Exchange functions.........................................................................12
1.2.3 Participants involved in Pakistan Stock Exchange...........................................13
1.3 The Problem Statement........................................................................14
1.4 Objective of the Study..........................................................................15
1.5 Justification........................................................................................... 15
1.6 Limitations............................................................................................ 16
1.7 Scope:................................................................................................... 16
1.8 Assumptions:........................................................................................ 16

iii

CHAPTER 2...........................................................................................
2.0 Research methodology....................................................................
2.1 Research Design................................................................................... 17
2.2

Procedures......................................................................................... 17

2.3

Populations:....................................................................................... 18

2.4

Sample and sampling method:..........................................................18

2.5 Measurement........................................................................................ 18
2.6

Variables identified............................................................................ 18

2.7 Hypothesis............................................................................................ 19
2.8 Statistical tools:.................................................................................... 19
2.9 Software employed:..............................................................................19
3.0 Literature Review...................................................................................
3.1 Small and Medium Investors:................................................................20
3.2 Liquidity Risk and Expected Stock Returns:..........................................20
3.3 Decisions Of The Individual Investors:..................................................21

3.4 Stock Market Manipulation:...................................................................22

3.5 Knowledge of the Individual Investors:.................................................23
3.6 Informed and Uninformed Manipulators:...............................................23
3.7 Relation between institutional and individual investors........................24
3.8 Small Investors in the Market Crash:.....................................................25
3.9 Dilemma for Small Investors:................................................................26
3.10 Success for Individual Investors:.........................................................26
3.11 Can individual investors beat the market?..........................................26
3.12 Individual Investors Sentiments and the Stock Returns.....................27
3.13 Historical Liquidity Betas:....................................................................27
3.14 Variation in Stock Returns due to Liquidity and...................................27
Idiosyncratic Risk:....................................................................................... 27
CHAPTER 4............................................................................................
4.0 Analysis and Interpretations:.......................................................................
4.1 ANALYSIS 1:........................................................................................... 29
4.1.1 REESULTS THROUGH THE PROTFOLIO:...............................................29
4.2 Interpretations of the Method 1:...........................................................30
Results 2009............................................................................................... 30
4.2.1 Interpretations of the Method 1:........................................................31
Results 2010............................................................................................... 31
4.3 Results from the Investment Portfolio:..................................................33
4.4 Analysis 2:............................................................................................. 33
4.5 Correlation Analysis:............................................................................. 47
4.5.1 Investors Failure and Liquidity of the firm....................................................47
4.5.2 Education and Failure of Investors..............................................................48
4.6 Cross tabulation Analysis:.....................................................................52
4.7 Regression analysis:..............................................................................56
4.8 Findings:................................................................................................ 58
Chapter 5.............................................................................................
5.1 Conclusion......................................................................................
5.2 Recommendations:.........................................................................
APPENDIX:...........................................................................................
Table 1.1..............................................................................................

Table 1.2..............................................................................................
Table1.3...............................................................................................
Table 1.4..............................................................................................
Table 1.5..............................................................................................
Table 1.6..............................................................................................
Table 1.7..............................................................................................
Table 1.8..............................................................................................
Table 1.9..............................................................................................
Table 1.10............................................................................................
Table 1.11............................................................................................
Table 1.12............................................................................................
Table 2.1..............................................................................................
Table 2.2..............................................................................................
Table 2.3..............................................................................................
Table 2.4..............................................................................................
Table 2.5..............................................................................................
Table 2.6..............................................................................................
Table 2.7..............................................................................................
Table 2.8..............................................................................................
Table 2.9..............................................................................................
Table 2.10............................................................................................
Table 2.11............................................................................................
Table 2.12............................................................................................
Table 3.0..............................................................................................
Table 4.0..............................................................................................
BIBLIOGRAPHY...................................................................................
References.........................................................................................

Executive Summary:
The purpose of this study is to know why Individual investors fail in the market. What
causes the individual investors to fail in the Stock Exchanges? This research answers
some of these questions. This research has identified some of the important variables that
have influenced the success of the individual investors and due to those factors individual
investors do not get the sufficient returns from their investments. This research has
identified the factors that have influenced the individual investment trading decisions
which are vital for particular investment in several securities.
This research has been conducted through two different research methods. One is the
Investment Portfolio in which the past data of five securities from different caps has
been taken i.e. blue chip, large cap, mid cap and small cap. Companies that are taken for
this research are Engro, Attock Refinery, Arif Habib, OGDCL and JS investment Ltd.
This portfolio has been made in order to know the returns as an individual investor by
considering the 2 years past data of Karachi Stock Exchange (KSE). Returns showed
great variations over the period and the outcomes showed that liquidity of the firm in
order to predict future returns are significant so as the historical data and investment
knowledge of the investor is momentous in predicting the future returns from the stocks.
The results of the Investment Portfolio revealed that one of the liquid company is
Engro and its results were consistent even in the period of economic downturns. Engro is
included in mid cap so mid cap is better for individual investors to invest in and moreover
to gain future returns.
The second approach in analyzing the returns of individual investors and their weak
performance in the stock exchange was the Questionnaire approach. The major source to
collect data for the questionnaires was the Karachi Stock Exchange where there are
certain individuals who can easily answer the researchers questions. In this approach,
several questions were asked from the individual investors in KSE regarding liquidity,
their education, investment knowledge and the past record of the investment firm. 384
8

respondents were included in the second approach to predict the future returns of the
investors. Three different hypotheses were made and on the basis of these hypothesis
research was conducted. Liquidity of the company was kept in mind of the investor to
gain returns and moreover the next hypothesis was to know that past performance of the
company helps the individual investors to gain returns or not. Similarly, the last
hypothesis was to know that is investment knowledge of the investors is important for
investors in trading decisions.
Through critically evaluating the hypothesis, it was concluded through the regression
analysis that one of the major significant factors that lead to the failure of the investors in
the stock exchange is the past historical data. Investors rely on the past trend of the
company in which they invest and due to that they face losses and this leads to the failure
of the individual investors.
If individual investors critically use their skills and knowledge, their experience then they
can easily beat the stock market and get returns easily.
The research identified that weak performance of the investors in the stock exchange was
mainly due to their reliance on the past record and the past performance of the company
in which the investors are investing in. It illustrates the fact that individual investors are
actually underperforming in the stock market and past data of the company is not the
measuring tool to predict the future returns for the investors. Historical data give the
wrong impression to the investors in investing in a particular security. Large cap firms
and the liquidity of the company are important measurable tools for investors to invest
and get sufficient returns so that they would be able to beat the market with their
outstanding performance by having all the valuable information needed to get returns.

Chapter 1
1. Introduction
1.1 Overview of Topic
The purpose of this research is to examine the prospects of success and failure of small
and medium investors (individual investors) in Pakistan Stock Exchanges. Individual
investors are of significance importance in the financial market because unlike different
institutional investors they do not have enough money to invest heavy amount of their
funds in the stock market. Individual investors want to grow with the little investment
they had made in Stock Market. But in any business game there are always some
prospects of failures too. Nevertheless failures could not resist investors to invest in the
Stock Exchange. Thats why they have to deal with some risk factors that lead them
either to the success or failure in the Stock Exchange of Pakistan.

1.2 Historical background

In the business world, where every person wants to get success rather being called as a
failure, competition has grown up among different participants of the financial market i.e.
Stock Exchange. Within this business world, there are some individuals who want to raise
their money o the highest possible level by indulging into the market of stocks. These
individuals are small and medium investors who need to harvest their money in a best
possible way so that their funds could be efficiently utilize by them and gain profit.
The place where individuals can succeed is the platform of stock exchange.
Stock Exchange has provided an enabling environment to individual investors through
which they can make decisions and sale or purchases the stocks/securities.
Individual investors try hard for the success in the stock market so that they can earn
profits from their investments. But there are some big players in the market like the
institutional investors who sometimes become the block for the success of individual

10

investors because at times individual investors try to imitate and follow the institutional
investors which shows the herding behavior between investors. [1]
Information plays a major role in the financial market i.e. Stock Exchange because
efficient stock market provides opportunities for investors to trade easily. [2][3] In order
to gain success, individual investors must have knowledge of different stocks and
portfolios they are investing in because without prior information, individual investors
will face failures.
Moreover, market efficiency is improved without the intervention of market manipulators
[4] market manipulation is the buying and selling of a security for the purpose of inflating
or deflating its market price, this manipulation may also lead to the failure of small and
medium investors. [5]
In 1609, history reveals that investors in the Stock Exchange have shown a harmonized
modest trading behavior which led the market to move. [6] While Stock Exchanges are
the platform that provide a platform to investors and it started in the 12th century. In
addition to, Stock Exchanges facilitate an investor to raise capital from investments an
investor has done so that he can avoid failures.

Stock exchange is a platform for small, medium and institutional investors where they
can buy and sell securities or stocks. Stock exchange provides certain benefits to the
investors. For buying and selling purposes, prices are set by the demand and supply of the
respective stock i.e. the market forces.

1.2.1 Stock Exchanges of Pakistan

Stock exchanges of Pakistan involve three stock exchanges. They are
1) Karachi Stock Exchange
2) Lahore Stock Exchange
3) Islamabad Stock Exchange

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Karachi Stock Exchange is one of the oldest stock exchanges of Pakistan since the
inception of the other two stock exchanges i.e. Lahore Stock Exchange and Islamabad
Stock Exchange. Karachi Stock exchange is called the KSE 100 Index as it includes 100
companies according to the sectors in Pakistan. [7]
Lahore Stock Exchange ranks second after Karachi Stock Exchange, the number of
listings in Lahore stock exchange are 671. [8]
In Islamabad stock exchange 361 companies are listed. [9] In order to protect investors,
IS has launched Investors Protection Fund. Ethical codes of conduct are established in
the ISE for the proper control so that nobody could able to manipulate the stocks. Besides
proper control, regulators are also there to support all kind of investors.

1.2.2 Stock Exchange functions

1) Stock exchange provides an opportunity to investors and companies to raise their
capital by buying shares at lower price and then selling at higher prices.
2) Stock exchange direct investors to mobilize their investment.
3) It provides institutional investors a chance to win by hedging against the price
volatility.
4) As there are different members in the Stock exchange so it also becomes the
source of employment for members as well as for the investors.

Different caps in KSE

There are three caps in the stock exchange of Karachi i.e.

Small cap
Medium cap
Large cap
Blue chip companies
1. Small Caps
Small caps are the stocks that have small market capitalization and it can be vary
according to the different brokerage houses.
12

By investing into the small caps of stocks, it facilitates small investors to gain success
against the institutional investors.
Companies that are included in the small cap of KSE are
TRG Pakistan,
Silk Bank and
World call telecom
Blue chip companies
These companies have the highest market capitalization. Companies included in the large
caps are OGDCL, banking sectors and foreign fund managers.
2. Large cap
Companies included are JS, PSO, Allied Bank, Nestle Pakistan.

1.2.3 Participants involved in Pakistan Stock Exchange

Participants that are included in stock exchange trading platform are institutional
investors, small and medium investors, brokers and regulators.

1. Institutional investors
Institutional investors are the organizations investing large amounts of money in different
stocks, in real property and in different assets. The amount of money they invest in the
stock exchanges are sometimes the profits of the company.

Types of institutional investors

Institutional investors include different banks, insurance companies, hedge funds, mutual
funds.

2. Small and medium investors (Individual investors)

13

These individuals involve those who have savings and want to raise their savings as an
investor in stock exchange independently. These people are not forced by the any
company to invest in the stock exchange rather he came by his own will.
They are very different class of participants in the stock exchange. They are also called
as the noise traders who mobilize the market.[10]Another name for these participants is
Retail investors as they purchases small amounts of securities or stocks against the
institutional investors.

3. Regulators
Regulators of Pakistan Stock Exchanges are SECP i.e. security and exchange commission
of Pakistan that provides an enabling environment to all kinds of investors to trade easily
in the market. Also the duty of the regulator is to monitor the prices of stocks if they are
being manipulated and also to keep check on the market efficiency provided by the Stock
Exchange.
These duties are fulfilled by the regulators so that every investor can trade with the trust
which the stock exchange has built over a period of time.

1.3 The Problem Statement

The core idea behind this study is that in Pakistan it has been seen that individual
investors in some areas of trading are not given chance to succeed. They face failures
even with the prior little knowledge. But sometimes there are situations that do not led
the individual investors to beat the market.. In order to find out the factors of failure of
these types of investors, the researcher has to keep in mind the different market forces in
the stock exchange i.e. economic uncertainties, investment knowledge skills, liquidity of
the company in which the investors are trading and the historical trend that is the past
performance of the individual investors.
Various assumptions will also be used identifying the causes of failure such as:

Past performance of the company (historical data)

14

Investment knowledge skills of the investors.

Preference of the individual investor while investing in a particular stock.

So with the help of these assumptions the researcher would be able

To know the factors that lead to the failure of individual.

1.4 Objective of the Study

Individual investors are of significance importance in the financial market because if they
will succeed the financial market as well as economy will also grow. This success then
also gives opportunities to other risk averse individual investors to raise their capital in
the stock exchange. Manipulators should be discouraged in the stock market because
information plays a key role in making a decision for the investor to which stock to buy
and which stock to sale.
Therefore, individual investors must be a given a priority so that they can trade in a free
environment and do not hesitate to invest because they will then improve and see a
growth in their investment.
What are the factors that lead to the failure of the individual investors in the Karachi
Stock Exchange?

1.5 Justification
In Pakistan, when Stock market of Islamabad Stock Exchange crash in 2010, small
investors had to face loss of more than Rs. 8oo billion. They accused the regulators as
according to the small investors market manipulation was done due to which they failed.
When in 2008, the stock market crash out of 50,000 small investors only 4,500 investors
claimed for the compensations [11]
These justifications led the researcher to know the prospects of success and failure of
small and medium investors in Pakistan stock exchange.
15

1.6 Limitations
Individual investors cannot be neglected but due to the time constraint this research will
only focus the individual investors of Karachi Stock Exchange.
In addition to, some articles require membership and some cannot be seen without paying
dollars. So lack of resources is one of the limitations in conducting this research.

1.7 Scope:
Although this research is being conducted in Karachi Stock Exchange, its findings can be
generalized to those individual investors who are participating in Lahore Stock Exchange
and Islamabad Stock Exchange. Moreover, KSE is the biggest of both the Stock
Exchanges of Pakistan.
This research has a broad scope as it will create awareness among the individual
investors to know causes of failure as well as the success factors in the Stock Exchange.

1.8 Assumptions:
The assumptions for this study are:
1) Investment knowledge of the individual investors.
2) Past performance of the company in which the investor is investing.
3) Individuals prefer liquidity of the company.

16

CHAPTER 2
2.0 Research methodology
2.1 Research Design
The study will be base on qualitative and as well as quantitative design.
The descriptive study will be undertaken on the basis of volume trading in the historical
data of stock exchange. The researcher will analyze the past trends of 3 years so that the
researcher as a small investor would able to get the high profits and to know how small
investors trade in the market.

2.2 Procedures
Following steps will be involved in this study
Step 1:
Identification of broad area of research interest.
Step 2:
Preliminary data gathering through interviewing and literature surveys.
Step 3:
Defining the problem statement.
Step 4:
Development of a theoretical framework by clearly defining and labeling the variables.
Step 5:
Generation of hypothesis.
Step 6:
Scientific research.
17

Step 7:
Data collection, analysis and interpretation.
Step 8:
Answering the research question and proving the best suitable hypothesis.

2.3 Populations:
The target population will be the small and medium investors of Karachi stock exchange
who invest their funds in a small amount in order to gain success.

2.4 Sample and sampling method:

In this study the sample will be of 384 respondents of KSE. Convenience sampling
method will be used to know the desired results.

2.5 Measurement
1) The secondary data would be collected through journals, research papers, magazines,
books and internet.
2) A portfolio of stocks will be made by the researcher to measure the volatility, risks, and
trading volume of different stocks i.e. of small cap, large cap and blue chip companies as
an individual investor.
3) The questionnaire will then give the viable proof of failure of individual investors in
the stock exchange.

2.6 Variables identified

Variables which have been identified are:
1) Knowledge of the investor.
18

2) Past performance of the company.

3) Preference of the individual investors (liquidity).

2.7 Hypothesis
Ho: Historical data leads to the failure of individual investors in KSE.
Ha: Historical data do not lead to the failure of individual investors in KSE.
Ho: lack of investment knowledge skills lead to the failure of individual investors
Ha: lack of investment knowledge skills do not lead to the failure of individual investors

Ho: individual preference (liquidity) lead to the failure of investors.

Ha: individual preference (liquidity) do not lead to the failure of investors

2.8 Statistical tools:

The statistical tool which is preferable for the study is the mean of trading volume.

2.9 Software employed:

Spread sheet

SPS

2.10 Research questions relating to the hypothesis:

In order to know the success and failures factors of individual investors following
questions will be asked like in order to measure the efficiency of stock market

The researcher will ask from the individual investors about the information
provided to investors is either on the basis of historical data or not?

Their knowledge will be checked by the level of education individual investors

have.
19

CHAPTER 3
3.0 Literature Review
3.1 Small and Medium Investors:

Small and medium investors are of considerable importance in the stock market because
they are the ones who suffered more during the crash of the stock market. Although the
market manipulation is prohibited in stock market (Dong, Xianfang.2003) but to achieve
success, market manipulators do not care for the sentiments of the individual investors
(Kaniel, Saar, 2004). This study shows that investors participation in the stock market
provides liquidity to the stocks. Asset prices , stock prices and exchange rates are the
predictors that drive the economy because these indicators then help an individual
investors to forecast the future earning growth of his investment. According to Xiangfng
it should be kept in mind of investors that whenever an economy faces downturn the
liquidity of the stock market also becomes low then the participation of the investors
becomes low. This is only done by the decision of the individual investor because
changes are made in the portfolio according to the will of the economy and he cannot
argue with the change in the economy, although he can protect himself and can avoid
failures by investing into the stocks.

3.2 Liquidity Risk and Expected Stock Returns:

Pastor (2001) and Stambough (2001) found through their research in the predicting the
stock returns that in the investment decisions of the investors. Liquidity is an important
variable for measuring and predicting the future returns. Stambough found that there is a
cross sectional relation between the liquidity of the assets or security and the stock
returns. Stocks which have higher liquidity shows higher expected returns. Investors are
remunerated for the expected liquidity of the stocks and this appears in the demand of the
20

investors. Through using different liquidity measures Pastor identified that less liquid
stocks have higher returns. They also identified the occurrence of time series relation
between the expected returns and the liquid stocks. Liquidity is identified through the
market. Market trend analyzed the characteristics of the stocks that are liquid. This kown
market wide liquidity is the state variable in expecting future returns. Liquidity varies
over time because different situations and the market wide scenarios make the stock
liquid or illiquid. So this trading activity of the investors to gain excessive returns can be
measured through the liquidity. Same is the relation between the turnover and the returns.
The greater the turnover of the stocks the greater is the liquidity of the stocks and so the
expected returns. Authors have identified that volatility of the stocks lies in the market
and as the Tokyo and Japan stock exchange are of great volatility this would impact the
returns of the investors. this helped in finding the fact that more volatility in the market
gives the lower expected returns which cause the individual investors to fail and
underperform in the market. In addition to, authors reported the fact the stocks which are
more exposed to the market show greater variability in the expected returns and so as the
liquidity.
Pastor (2001) and Stambaugh (2001) in their literature reported these variabilitys and the
future returns over a period of 34 years. This period of cycle enabled them in predicting
the future returns of the stocks through liquidity, market wide situations and hedging
against the exposure of different risk in order to protect the investment of the individual
investors. holding period of the investor of a particular security is also a major concern
for future returns. Because over a 34 year period of research, researchers have identified
that holding period of less than a year yields smaller returns. In contrast to the holding
period, fixed income returns are negatively correlated.

3.3 Decisions Of The Individual Investors:

While trading, individual investors should take their decisions on the basis of knowledge
they grab from the market. If small investors are influenced by the big players in the
market that will lead to the failure and they would resist in investing their funds into the
21

stock exchange (Davenow, Welch,1996). Most of the studies try to concentrate on the
pragmatic studies where group of investors showed a herding behavior. Individual
investors on the other side tend to make psychological biases and quickly grab only to the
attention seeking news of the market.
In the research paper of Sunil Sharma it is evident that the herding behavior is only due to
the opportunities available in the market for different kinds of investors. Herding is not a
rational behavior. There are reasons for this kind of behavior as

flawed information

Reputation

Compensation

Some investors whether they are individual or group they try to imitate and observe each
others action. This herding behavior leads to the failures of investors.

3.4 Stock Market Manipulation:

Market manipulation is prohibited in different countries but Pakistan is still facing such a
situation where investors hesitate to invest more. According to the study of Aggarwal and
Wu in 2003, well informed participants try to manipulate the stock prices due to which
individual investors have to face losses ad the market become inefficient. When there is
more competition in the stock prices people who are well informed make the market
worse and it becomes easier for the manipulators to manipulate prices easily. In this worst
situation, need of regulators is required so that regulators kept an eye on the manipulation
of the prices. The role of regulators i.e SEC Security and Exchange Commission decides
the way an individual can trade in the market to pursue equal chances of trading for the
protection of investors. regulators, brokers, insiders are responsible for the manipulation
in the stock market (Agarwal,Wu, 2003). Just because of the manipulator the prices and
liquidity becomes high when he sells the stock. Allen and Gorton put their argument that
some investors who are in need of the securities to purchase are then forced to buy just
due to the presence of market manipulation. This price manipulation benefited the
manipulator as he gained the success and sell them the securities with a very little portion
of the profit. Therefore, price manipulation had an adverse effect on the small investors
who already have a little amount to save himself and invest in a stock exchange.
22

3.5 Knowledge of the Individual Investors:

It doesnt mean the individual investors lack knowledge of the stocks. They are capable
enough to enter into the stock market and get higher returns through their knowledge and
skills. Individual investors who have skills they take advantage of the market
inefficiencies to earn success.

This study has been based upon the Efficient Market Hypothesis (EMH).

According to this hypotheis individuals performance is random unless they get

any sudden information or private information.

Individual investors cannot beat the market unless there is a market inefficiency.

Individuals who have performed abnormal will perform the same in the future
unless there is a condition of market manipulation or mispricing.

On the other hand, all individual investors do not exhibit the same behavior. Certainly, as
Barber and Odean (2000) note, those individuals who performed well are on average of
0.5% per month.
There are different assumptions and analysis about the prospects of Success and Failure
of Small and Medium Investors in Stock Exchange.
But the analysis may be different in scenario of Karachi Stock Exchange so the
researcher will conclude after the analysis.

3.6 Informed and Uninformed Manipulators:

In this study of Omri Yadlin (2001), there is mix of two theories also he is questioning the
conventional wisdom with the theories that is manipulation bad? That also depends on
two situations with two factors i.e informed manipulators and the uninformed
manipulators. The wisdom pf both the manipulators is to affect the stock prices to gain
benefits but the uninformed manipulator assumed that the market information will be
23

better for the stock prices and then the stock value will be better. The uninformed market
manipulator goes for the private information and believed that market has mispriced the
stock value. But this private information should be dealt with the regulators.
Consequently when informed investors trade with the uninformed investors they lose
which causes a bad failure. as the informed investors try to rely on the market efficiency.
According to Yadlin he has given two objections regarding informed and uninformed
manipulators. One is that market efficient manipulators who are well learned, they are
irrational as they convey their secret information about the stock slowly and gradually in
the market.
The other objection proposed by the Yadlin is that informed players have a way out. They
can protect themselves rather than protecting the small investors who really want to take
benefit from the stock market. Moreover, sometimes informed players are incapable of
telling the right information from the false one.
In the conclusion of this study of Omri Yadlin, uninformed and informed manipulators
should be ban from the financial market as they are creating hurdles for all types of
investors.

3.7 Relation between institutional and individual investors.

Wi, Le, Wang in 2009 studied the herding behavior of individual and institutional
investors in the stock exchange of China. On the basis of volume that is trade in the stock
market , they proved that institutional investors showed a more herding behavior than the
individual investors because they are better informed than the individual investors who
are quite less informed. Here again the oissue of market efficiency comes in which is an
important aspect for the stock market. According to this study, there is a negative relation
between a portfolio of stocks that individual investors possess and the on the volume they
are trading on. It is due to the evidence that individual investors rely more on the
information that is public that why they face fail more than the institutional investors.
Individual investors keep on relying the information that is on news channel rather than
estimating the cashflows he would have after the end of holding period. Institutional
24

investors sre ready for the up and down of the market while the individual investors do
not show this behavior. They rather show the herding behavior towards the ijstituional
investors. in this study, researchers have observed two aspects of herding

Herding towards the market

Herding towards the particular stock

When individual investors only follow the market trend i.e. the public information he can
lose and this causes the failure of an individual investors. Herding towards the particular
stock means that when institutional investors or the group of investors only follow one or
two securities rather than keeping an eye on all of the stock portfolio.
In this trend, some individual investors try to follow the institutional investors that cause
the herding of individual investors and they fail in the market.

3.8 Small Investors in the Market Crash:

(Nation newspaper, 2008) small investors want the help of regulators of stock exchange
i.e SECP and small investors demamnded for the compsensation of losswes they have
bear since the crash of the market over the period of four years but SECP was unable to
pay the compensation. In reaction to that small investors threatened to take this matter to
the Supreme Court if SECP fails to do so.
Small investors accused the regulators for this market manipulation. At the end , 8 were
charged for the price manipulation of stocks and they were fined with the three years of
imprisonment.
Small investors also complained about the regulators that SECP always kept complaints
to itself as there are thousands of small investors complaints are registered.

3.9 Dilemma for Small Investors:

(E-paper 2008) its the dilemma for the small investors who want to grow and succeed in
the stock market but there is no protection for the small investors. brokers through which
25

different small investors buy or sale the securities as they act as an intermediary between
seller and the buyer,. If they are hurting investors then Pakistans economy is on stake.

3.10 Success for Individual Investors:

(Ellis, Elemts of Investing pg:13) in this book, the author Ellis has provided some
guidelines to individual investors for success. The first guideline to secure the investment
for that an individual investor has to invest in his savongs in the stock exchange on the
expected rate of return whichever is closer to the market return. This will then guide an
individual and the confidence will be built withimn him that now he owes his money and
how to double it for the future growth. For that purpose individual has to notice the
opportunity cost as well as the precious time which the author has called the Time is
Money.
An individual investor has to diversify its risks in investing different portfolio of stocks
so that if he loses from one stock he should gain from the other one.
The author has used the term of KISS Investing i.e to keep it simple and sweet heart is
the best and easiest way to earn success.

3.11 Can individual investors beat the market?

According to the researches of Shumway(2005) and Coval (2005), they analyzed the
performance of the individual investors through 7 years and analyzed their performance
persistence over the period of time. The data they gathered through NYSE and the major
research done by them was the stock returns through their performance persistence and
the long term and short term horizons.
Hirshleifer(2006) identified that in the short term horizons individual investors perform
well while in the long run they are unable to beat the market and underperform in the
stock market. Moreover skillful individual can beat the market through their knowledge
about the company in which they are investing in.
26

3.12 Individual Investors Sentiments and the Stock Returns.

According to the Ritman and Saar (2004) these are the investors sentiments that predict
the future returns of the investors and while the short horizon tests were also given. In
addition to past performance of the company has not been able to predict the returns.

3.13 Historical Liquidity Betas:

Greater volatility in the market makes the stock more liquid and then liquidity of the
stock help the individual investors to expect greater future returns. Campbell, Grossmen
and Wang (1993) suggested the model of variability between the liquidity of the stocks
and the expected returns which yields the greatest profits to individual investors. Authors
also did the regression analysis in which the there were several independent variables
were identified that influenced the returns and the performance of the investors. These
independent variables were the influencing factors in asset pricing. The 32 year period of
analyzing the stock returns is not an easy task; authors were successful in determining the
returns and the profits gained by the individual investors through investing in the liquid
stocks in an investment portfolio.

3.14 Variation in Stock Returns due to Liquidity and

Idiosyncratic Risk:
Idiosyncratic risk is the risk that can be minimized through investing in different kind of
securities and making a portfolio of those stocks. Then the idiosyncratic risk will be
eliminated in asset pricing. Merton (1983) and OHara (2004) illustrates that there is an
indirect relation between the idiosyncratic risk and the liquidity of the stocks in
determining the expected returns. So the individual investors performance over the 10
year period analysis varied over time.
But there are different arguments that have been placed by the Lucan and Heaten (1996)
that there is not a negative relation between the liquidity and the idiosyncratic risk. After
27

different findings and research they identified there liquidity is a market wide determined
and it is the predictor of the future returns. By being a long that is a person who buy the
securities get a low liquidity on the stocks as do the returns. But by attaining the position
of short (who sells the security) liquidity and the expected returns are increased.
Many of the research papers have identified the fact that there is a negative correlation
between the liquidity of the stocks and the expected returns. But by combining different
securities their risk are almost eliminated and that single portfolio resulted in large
returns. In this way individual investors are able to beat the market. Inventory control
models have been tested in measuring the liquidity if the stocks . Merton and Pederson
(1983) that returns varied through the bid price and the asked price and this has been
tested through analyzing and evaluating the data of NASDAQ stock exchange.
Regression analysis have been done by Miller and Scholes (1973) that there is positive
skewness in the stocks of the individual investors which described the fact there are
sufficient returns for the investors which are profitable for him. By using the monthly
data of returns they concluded the opposite results there stocks which have more
idiosyncratic risk yields lowest returns.

28

CHAPTER 4
4.0 Analysis and Interpretations:
4.1 ANALYSIS 1:
4.1.1 REESULTS THROUGH THE PROTFOLIO:
Portfolio consists of five companies and it these are selected on the basis of different
sectors and as well as different caps i.e small cap, mid cap, large cap and Blue Chip
Company is selected. These companies include Arif Habib Limited which is a financial
service provider, JS in investment Ltd, Oil and Gas development corporation limited,
Attock Refinery Limited and Engro Corporations Limited.
ENGRO mean return during 2009 and 2010.
The greatest that have been identified through the investment portfolio is from the Attock
Refinery limited i.e. 0.42 and then the Engro Corporations Limited i.e. 0.33

2009
ARIF HABIB LTD*

-0.09

JSIL*

-0.38

OGDCL*

0.3

ATRL*

0.42

ENGRO*

0.33

29

4.2 Interpretations of the Method 1:

These are the average returns of the securities of two years from 2009 to 2010. These
average returns show the performance of the companies of different sectors as well as
their strategy towards economic situations in the period of two years.

Results 2009
Moreover it shows that how individual investors can take benefits from those companies
which are performing well in the stock exchange.
*Calculations of all the mean returns of year 2009 from January 2009 to December
2009 and their graphs are shown in detail in the given Appendix I.

In 2009, JSIL and Arif Habib Ltd showed decrease in the average returns while Engro,
OGDCL, and Attock Refinery showed good performance as compared to the other
securities.
This data indicates that investors had faced losses in the private company i.e JSIL and
Arif Habib Ltd which itself provides financial services to the investors while the other of
Karachi Stock Exchange i.e. production, oil and gas, and refineries did well in the year
2009 due to their
30

1) Production,
2) Research and Development,
3) Liquidity,
4) Effective risk management strategy
5) Goods and services.
6) Past performance

Securities

2010

ARIF HABIB**

-0.29

JSIL**

-0.22

OGDCL**

-0.1

ATRL**

0.01

ENGRO**

0.04

4.2.1 Interpretations of the Method 1:

Results 2010
Results calculated in the year 2010 showed major deviation in all of the five companies
that were doing well in the year 2009. Arif Habib ltd and JSIl were decline further as due
to the trend of 2009. But the worst impact is also seen in the refineries, explorations and
productions, and development companies.
The stock prices and the average returns declined due to no new development. Although
there were political and macro economic uncertainty in throughout the country but still
ENGRO and ATRL try to maintain itself in these conditions. And investors who were
investing in these sectors and companies do not face losses as compared to OGDCL, JSIL
and Arif Habib Ltd.
31

The graph of 2010 also shows that some of the companies tried to maintain their
performance, their liquidity and production in the economic conditions which do not
supported them and this indicate that their risk management strategy towards the stock
market were suitable.

**Calculations of all the mean returns of year 2009 from January 2009 to December
2009 and their graphs are shown in detail in the given Appendix II.

32

4.3 Results from the Investment Portfolio:

Results that has been derived from the investment portfolio is that there are certain
factors that influence the investment of the investors and in that case they face losses and
could not be able to grow in the stock market.
Most important that have been identified are the
1) Past performance of the companies in which investors have invested.
2) Liquidity of the company over the period of time.
3) Production, exploration and Research and Development of the company.
4) Financial stability of the investors as well as the of the company.
5) Risk management strategy of the company in time of inflation and economic
down turn.
These are major factors that investors should consider while investing in a particular
security because by keeping these factors in mind individual investors will be protected
from losses and they will rather grow in the Stock Market.

4.4 Analysis 2:
In order to support Analysis 1, the researcher has conducted another research which was
through questionnaires and through some interviews.
Question 1:
33

DEMOGRAPHICS
Education level:
1) primary
2) graduate
3) post graduate
4) secondary
Frequencies
education
Frequen
cy
Valid

Primary

79

graduate

129
134

Post
graduate

g
Total

Percent Percent

Cumulativ
e Percent

20.6

20.6

33.6

33.7

54.3

34.9

35.0

89.3

10.7

10.7

100.0

383

99.7

100.0

.3

384

100.0

secondary 41
Total
Missin System

Valid

34

11%

21%
1

35%

2
34%

3
4

Interpretations of Frequencies:
The frequency table shows that the greatest number of the individual investors in the
sample came from the Post Graduates (35%) who invest in the KSE, followed by the
graduates (33.7%). There are only 41 individuals who respond to this survey and their
education level is Secondary.
According to the researcher point of view investors who trade in the stock exchange are
well equipped with the knowledge they have as they mostly Post Graduates. So, there is a
greater number of Post Graduates people who trade in the Stock Exchange.

35

Question 2:
I have stock investment experience of ___________ years.

experience before
Cumulative
Valid

Missing
Total

Frequency

Percent

Valid Percent

Percent

.5

.5

.5

325

84.6

84.9

85.4

55

14.3

14.4

99.7

.3

.3

100.0

Total
System

383

99.7

100.0

.3

384

100.0

Interpretations of the second Question

Above table shows the frequencies of the individual investors who actually invest in the
KSE and the most respondents are who have experience in the stock exchange and their
years of experience are 1 year or less. Most of the investors who have experienced in
stock exchange are of 1 year or less than a year.

36

14% 0% 0%
1
2
85%

3
4

84.9% have an experience of trading of 1 year or less in the stock exchange that shows
their ability to invest in the stock exchange as well as their potential to gain returns. There
are only 2 respondents who have an investment experience of 5 years or above.
It illustrates that people investment their money for a short period of time and they dont
invest further if they are facing continuously losses.
This graph shows that the most of the people who invest in the stock exchange, their
holding period of holding a particular security is of 1 year or less.

37

Question 3:
Investment of the individual investors in the financial instrument
Descriptive analysis

Descriptive Statistics
N
financial investment 382
Valid N (list wise)

Minimum Maximum Mean

Std. Deviation Variance

1.050

2.25

1.103

382

Interpretations and Analysis

On a 4 point scale, descriptive analysis shows that the tendency to invest in the financial
instrument of the individual investors is low (2.25) and they mostly invest less than Rs.
100,000 in the stock exchange to avoid risks which seems that most of the individual
investors are risk averse.
While the value of 1 shows that the variance is high and the individual investors are very
close to the mean i.e. 2.25.
With reference to the question, researcher has identified that individual investors are risk
averse and they do not want their most of the money to be at stake which eans that they
are less risky and invest a very little amount of money in the stock exchange in order to
earn profits.
.

Question 4:
38

Before investing, individual investors give preference to one of the following:

Frequency analysis
investor prefer
Cumulative
Valid

past performance of the

company
liquidity of the company
risk management strategy
of the company
stability of the investment
done over the period
financial stability of the
company
Total

Frequency Percent

Valid Percent Percent

68

17.7

17.7

17.7

175

45.6

45.6

63.3

39

10.2

10.2

73.4

52

13.5

13.5

87.0

50

13.0

13.0

100.0

384

100.0

100.0

Most of the individual investors before investing in a particular security give preference
to the liquidity of the company 45.6% and after that investors prefer the historical
performance of the company (17.7%) that helps them in trading and also to gain returns.

13%

18%

14%

1
2

10%
46%

3
4
5

39

Interpretations and Analysis:

This table shows that individual investors are keen in knowing the liquidity of the
company because a liquid stock predicts the future returns. Half of the individual
investors prefer liquidity of the company before investing in a particular security because
this will help them in making better decisions.

40

Question 5:
Time frame of the individual investors to reach their financial goal is:

time frame
Cumulative
Valid

Frequency

Percent

Valid Percent

Percent

1 year or less

117

30.5

30.5

30.5

2-5 years

142

37.0

37.0

67.4

10 years

57

14.8

14.8

82.3

11-15 years

42

10.9

10.9

93.2

16 years or longer

26

6.8

6.8

100.0

Total

384

100.0

100.0

Interpretations and Analysis:

With reference to the question asked researcher has identified that many of the
respondents that is the individual investors want to gain success within a minimum period
of time. They want to gain success within 2 to 5 years. And if they are succeeded within
this period they will be no longer investing in that particular security or may be the
success motivates the investor to invest more in the stock exchange and with the more
money.
The time frame for the individual investors to reach their financial goal mostly preferred
by them is 1 year or less which is 30.5% and out of 384 respondents 117 preferred their
goal to be achieved in with 1 year.

41

11%

7%
30%

15%

37%

The pie chart proves that the second question of the survey that is in order to gain returns
or individual investors face losses they are risk averse and try to invest for I year and also
they have an experience of 1 year or less.

42

Question 6:
Investors trading decisions are based on the historical data?

historical data
Cumulative
Valid

Frequency

Percent

Valid Percent

Percent

highly agree

87

22.7

22.7

22.7

somewhat agree

98

25.5

25.5

48.2

neutral

82

21.4

21.4

69.5

disagree

79

20.6

20.6

90.1

strongly agree

38

9.9

9.9

100.0

Total

384

100.0

100.0

Interpretations and Analysis:

Individual investors, who invest in the stock exchange, mostly trade on the basis of
historical data. And 25.5% of the respondents somewhat agree on the fact they trade by
taking help of the historical data.
Many researchers have identified that historical data plays a vital role in predicting the
future returns for the investors. so it was tested through the questionnaire approach and
the results indicate that almost 90% of the selected sample agree that that they trade on
the basis of past performance of the company and this actually some times help them.
And the researcher duty is here to identify that is Success lies in the historical data or
not? Several other questions were also asked through the questionnaire approach
regarding the past performance of the company.

43

10%

23%
1

21%

2
21%

25%

3
4
5

Although there is a minute difference between those who slightly agree and those higly
agree(22.7%) and after that most the repondants who are unaware and they lack
knowledge of the investment they neither agree nor disagree because sometimes
historical data is unable to predict the returns of the investors then investors uses his own
investment skills and to gain returns.

44

Question 7:
Why individual investors do not get sufficient returns in the stock exchange?

investors fail
Cumulative
Valid

Frequency Percent

Valid Percent Percent

.3

.3

.3

73

19.0

19.0

19.3

37

9.6

9.6

28.9

77

20.1

20.1

49.0

historical data misleads

109

28.4

28.4

77.3

Economic uncertainties

87

22.7

22.7

100.0

Total

384

100.0

100.0

0
proper knowledge about
the company
financial stability of the
investors
lack

of

investment

knowledge

In that case, historical data is unable to predict the returns because according to the 109
individual investors historical data (28.4%) or past performance of the company is not
the right source to predict returns / gains in the stocks investments.
On the other hand, economic uncertainties (22.7%) are also one of the factors that leads
to the failure of the individual investors in the stock exchange.
After that the investment knowledge skills (20.1%) add to the factor of individual
investors when he is trading because without having certain knowledge about the
particular security he cannot even buy or sale the shares he possess.

45

22.7

0.3

19

1
9.6

2
3

28.4

20.1

4
5
6

The dependent variable of the research is that failure of the investors and when the
analysis of this variable wad done it showed statically that historical data is unable to
predict the returns if the company is has enough liquidity its still unknown that company
can face suddenly crisis to meet its liabilities.

Interpretations and Analysis:

On one side individual investors are saying that they trade on the basis of past
performance of the company and on the other side they said that the major factor why
individual investors fail in the market is that they rely heavily on the historical data that is
the past performance of the company. This fact indicates the researchers aye to the one
known truth that investors who keep historical data in mind and then trade are actually
the failure of the market because they think that things will always be the same as they
were in the past. But economic uncertainties and different situations cannot be the
determinant of predicting future returns and those situations cannot be applies for the
same security.

46

4.5 Correlation Analysis:

4.5.1 Investors Failure and Liquidity of the firm
Correlation between the preference of the individual investors and failure of investors is
when analyzed i.e. Question 4 and Question 7, following data is available.

Correlations
investors fail

Pearson Correlation

investors fail

investor prefer

.102*

Sig. (2-tailed)
investor prefer

.046

N
Pearson Correlation

384

Sig. (2-tailed)

.046

384

384
*

.102

1
384

*. Correlation is significant at the 0.05 level (2-tailed).

Interpretations and Analysis

Investors fail because they only see the liquidity of the company before investing into the
particular security; they do not prefer to see the past performance made by the company
nor the particular sector.
Table shows that the correlation exist between the variables i.e. individual preference
towards liquidity and the investors failure but the value of 0.102 i.e. 10.2% indicates
there is a weak relationship among the these two variables.
Significance value of 0.05 and the value of 0.046 indicates there is a correlation between
the preference of the individual investors and the failure of the individual investors in the
stock exchange which is dependent on the preference of the investors.
Correlations between liquidity of the firm and the investors failure are done because
many researchers have identified that liquidity is cross section ally related to the expected
47

returns. It means there is a correlation between these two variables and the correlation
analysis has identified this fact there is a positive relation between these variables.
If liquidity of the stock is increased then the stock will yield more returns than expected.

Correlations between question 1 and question 7

Correlation between the two variables education and the failure of the investors.
4.5.2 Education and Failure of Investors

Correlations
Education

Pearson Correlation

education

investors fail

.024

Sig. (2-tailed)
investors fail

.643

N
Pearson Correlation

383

383

.024

Sig. (2-tailed)

.643

383

384

Interpretations and Analysis

When the correlation between education of the investor and investors failure is analyzed ,
it is prove that there is no correlation between the two variables that these two variables
are independent of each other because the significance level 0.643 is greater than the
significance level of 0.05.
In addition to, the value 0.024 shows that among these variables there is a weak
relationship but simultaneously 0.643>0.05 which illustrates that there is education of an
individual investor do not matter in determining the failure of the investors.
According to the researcher, correlations between education factor and the failure factor
of the investor is taken because researcher wants to know whether there is an impact of
education skills and investment knowledge in the failure of investors. But this test has
48

revealed the truth there is no relation between the prior knowledge of the investor or the
investment tactics. If he is to fail even with the knowledge he will fail
So, it negates my hypothesis that individual investors whether they are post graduate,
graduate, secondary or have primary education it does not impact the failure of the
individual investors in the stock exchange.
Hypothesis 3 is not substantiated.

49

Correlation between question 5 and question 2:

4.5.3 Prior Experience of Investor and Financial Goal Time.
Years of experience in the stock exchange has any impact on the time frame of the
individual investors to reach their financial goal?

Correlations

time frame

Pearson Correlation

time frame

experience before

-.039

Sig. (2-tailed)
experience before

.447

384

383

Pearson Correlation

-.039

Sig. (2-tailed)

.447

Interpretations and Analysis:

No correlation exists between the time frame in which the individual investors wanted to
reach their financial goal and their experience in the stock exchange.
The negative correlation (-3.9%) exist between these two variables. Simultaneously the
value of 0.447>0.05 negates the relationship between these two variables.

50

Correlation between question 2 and question 7:

4.5.4 Prior Experience and Investors Failure.

Correlations
experience before investors fail
experience before

Pearson Correlation

-.163**

Sig. (2-tailed)
investors fail

.001

N
Pearson Correlation

383

Sig. (2-tailed)

.001

383

-.163

383
**

1
384

**. Correlation is significant at the 0.01 level (2-tailed).

Interpretations and Analysis:

The value of 0.001<0.01 which shows that it lies under the significance level but the
relationship between these variables is very weak i.e. 16.3%
Relation between the experience of the individual investors and the failure results in a
weak correlation,
The analysis between the knowledge of the investors, their experience does impact the
failure of the investors in the stock exchange but due to weak correlation between these
variables, the hypothesis 3 will be partially accepted.
Results from the correlation test indicates that having an experience of 2 to 3 years does
not mean that individual investors will be able to beat the market and he will perform
well in the market. The statistics have identified a weak relation between these variables.

Comparing means:

51

Group Statistics
investor prefer
investors fail past performance of the
company
liquidity

of

the

company

Std.

Std.

Mean

Deviation

Mean

68

2.84

1.323

.160

175

3.39

1.421

.107

Error

Interpretations and Analysis:

The group statistics shows the analysis between the two groups that is the past
performance of the company in which the investor is going to invest and the other group
is the liquidity of the company.
The relationship between the failure of the individual investors in the stock exchange and
the preference of the individual that is the liquidity has a significant relationship among
these variables. The mean of performance and liquidity is 2.84 and 3.39 with a standard
deviation of 1.32 and 1.42 respectively shows the relationship among these variables and
through this evidence it is proved that the liquidity of the company does matter in
meeting the objective of the investors and by only pursuing this factor they fail in the
stock exchange.

4.6 Cross tabulation Analysis:

4.6.1 Liquidity and Investors Failure:
To analyze the significant cross tabulation between the investors preference before
investing in a particular security towards the investors failure is as follows:

52

Chi-Square Tests
Asymp. Sig. (2Pearson Chi-Square
Likelihood Ratio
Linear-by-Linear Association
N of Valid Cases

Value

df

sided)

29.592a
30.575
3.976

20
20
1

.077
.061
.046

384

a. 7 cells (23.3%) have expected count less than 5. The minimum

expected count is .10.

Interpretations and Analysis:

Value of the chi square indicates the individual investors liquidity of the company to be
good to invest but due to the impact of economic uncertainties individual investors fail in
the stock exchange. The value of 0.77 and the degree of freedom shows tat there is no
significant correlation between these variables.

53

Chi-Square Tests
Asymp. Sig. (2Value
Pearson Chi-Square
Likelihood Ratio
Linear-by-Linear Association
N of Valid Cases

20.066
19.899
.185

df

sided)

20
20
1

.454
.464
.667

384

a. 6 cells (20.0%) have expected count less than 5. The minimum

expected count is .10.

Interpretations and Analysis:

Investors who are unable to compete in the market and they face losses due to the
misleading historical data and it assures from the result that investors who were
somewhat agree on this point that the they trade on the basis of historical data are one of
the failures in the stock market.
So there is a significant impact of historical data on the failures of the individual
investors.
Hypothesis 1 is substantiated.

54

historical data * investors fail Cross tabulation

Count
investors fail

Total

proper
knowledge
about

financial

the stability

lack
of investment

of historical
data

economic

company

the investors knowledge

misleads

uncertainties

18

18

16

26

87

17

20

37

17

98

neutral

15

18

26

15

82

disagree

13

11

13

20

22

79

10

10

38

73

37

77

109

87

384

historical

highly agree

data

somewhat
agree

strongly
disagree
Total

Many of the investors in the stock exchange who somewhat agree that historical data
misleads the investors and this causes the failure of the investors.
Out of 384 respondents, 109 responded to the fact and they somewhat agree on the basis
that historical data misleads to the investors and due to this fact they face failure in the
stock exchange.
So, hypothesis 1 is substantiated.

55

4.7 Regression analysis:

Regression analysis between all the independent variables and the dependent variable
will show that in all the variables

Model Summary
Adjusted
Model
1

R
.117

R Std. Error of the

R Square

Square

Estimate

.014

.006

1.413

a. Predictors: (Constant), years of experience, historical data,

investors prefer

ANOVAb
Model
1

Sum of Squares df

Mean Square

Sig.

Regression

10.124

3.375

1.691

.169a

Residual

734.615

368

1.996

Total

744.739

371

a. Predictors: (Constant), years of experience, historical data, investors prefer

b. Dependent Variable: investors fail

Coefficientsa
Standardized
Unstandardized Coefficients

Coefficients

Std. Error

Beta

(Constant)

2.873

.252

historical data

-.020

.057

investors prefer

.113

years of experience

.069

Model
1

Sig.

11.384

.000

-.018

-.351

.726

.057

.103

1.968

.050

.080

.045

.865

.387

a. Dependent Variable: investors fail

Analysis and Interpretations

In order to test the hypothesis, regression analysis is done which have indicated that
which variable is the most significant factor that impact the failures of the individual
investors.

56

The dependent variable is the failure of the investors in the stock exchange and the
independent variables are historical data, individual preference towards liquidity of the
company while investing in a security and the investment knowledge skills of the
investors.
In the model summary, the R Square (0.014) is the square of the multiple R. While Anova
table shows that 1.691 is significant at the 0.169. while the degree of freedom shows that
there are 3 independent variables.
Moreover the results illustrates that 1.4% of the variance (R square) in the failures of the
investors has been significantly explained by the three independent variables.
The table of the coefficients shows that the among the three variablesthe most influential
variable which affects the failures of the investors in the stock exchange.
Under Beta of Standardized coefficients, the highest number of beta is -0.18 which is
significant at the significance level of 0.0001 levels.

This is the only independent variable that is significant. The negative beta indicates that if
failures of individual investors in the stock exchange are reduced, it is necessary to
provide historical data to the individual investors in the stock exchange.

57

4.8 Findings:
The researcher has identified the following figures and results from the research.

1) Greatest number of the individual investors in the sample came from the Post
Graduates (35%) who invest in the KSE.
2) Descriptive analysis shows that the tendency to invest in the financial instrument
of the individual investors is low (2.25) and they mostly invest less than Rs.
100,000 in the stock exchange to avoid risks which seems that most of the
individual investors are risk averse.
3) Most of the investors who have experienced in stock exchange are of 1 year or
less than a year .i.e. 84.90%.
4) The time frame for the individual investors to reach their financial goal mostly
preferred by them is 1 year or less which is 30.5% and out of 384 respondents 117
preferred their goal to be achieved in with 1 year.
5) Although there is a minute difference between those who slightly agree and those
highly agree (22.7%) and after that most the respondents who are unaware and
they lack knowledge of the investment they neither agree nor disagree because
sometimes historical data is unable to predict the returns of the investors then
investors uses his own investment skills and to gain returns.
6) According to the 109 individual investors historical data(28.4%) or past
performance of the company is not the right source to predict returns / gains in the
stocks investments.

58

7) The relationship between the failure of the individual investors in the stock
exchange and the preference of the individual that is the liquidity has a significant
relationship among these variables.
8) Correlations between education factor and the failure factor of the investor are
taken because researcher wants to know whether there is an impact of education
skills and investment knowledge in the failure of investors. But this test has
revealed the truth there is no relation between the prior knowledge of the investor
or the investment tactics. If he is to fail even with the knowledge he will fail.
9) On the other hand, an economic uncertainty (22.7%) is also one of the factors that
lead to the failure of the individual investors in the stock exchange.
10) Coefficients show that among the three variables the most influential variable
which affects the failures of the investors in the stock exchange. Under Beta of
Standardized coefficients, the highest number of beta is -0.18 which is significant
at the significance level of 0.0001 levels. The negative beta indicates that if
failures of individual investors in the stock exchange are reduced, it is necessary
to provide historical data to the individual investors in the stock exchange.

59

Chapter 5

5.1 Conclusion
Historical data, preference of the individual investor while investing into the particular
security and the investment knowledge skills are major factors that lead to the failure of
the individual investors in KSE. These factors are the major concerns for individual
investors to trade in the securities.
Two different approaches were used to determine the major factor that affect the
performance of the individual investors in KSE. Investment portfolio considered different
caps of the stock exchange and it revealed that Engro which is included in the mid cap of
the KSE and has liquid stocks. As liquidity is determined by the market. If there is more
liquidity the investments will yields profits. As the investment portfolio was made
through the process of historical pattern of different securities. So in determining the
performance of the individuals historical data of any firm is also important. So the
portfolio results indicate that past performance and the liquidity of the stocks made the
investors successful in the stock exchange.
Second approach was the questionnaire approach in which different influencing factors
were taken into consideration. Through the hypothesis development several results were
found like 35% of the individual investors are well educated to trade in the stock
exchange. 84.9% of the individual investors trade only for the period of 1 year or less.
30.5% of the investors want returns and want to gain success through their investment
within a period of 1 year. 28.4% of the respondents said that historical data is not the
right source to predict the future returns. 22.7% of the investors said that knowledge do
not play a major role to gain success in the stock exchange. But a very little percentage of
the people respond that economic uncertainty can be a factor of failure in the stock
exchange.

60

Moreover 28.8% of the respondents have identified the cause of failure of investors in the
KSE is the historical data and it is not the major source to predict the future returns as
well as to be successful in the stock market.
With reference to the analysis and the findings correlation between investment
knowledge and the failure of the investors with the end result that there is no correlation
between these two variables. As the value was above the significance level that is 0.643.
On the basis of findings, Regression analysis concludes the result of this research and it
find out that among the major variables, liquidity, investment knowledge skills and the
past data of the firm, major factor that lead to the failure of the investors is the reliance on
the past data of the firm. Investors rely on the past trend of the company in which they
invest and due to that they face losses and this leads to the failure of the individual
investors.
It illustrates the fact that individual investors are actually underperforming in the stock
market and past data of the company is not the measuring tool to predict the future
returns for the investors. While the liquidity of the company is also important measurable
tools for investors to invest and get sufficient returns so that they would be able to beat
the market with their outstanding performance by having the entire valuable information
needed to get returns.

61

5.2 Recommendations:
As per the variables identified by the researcher through the literature review and then the
findings and conclusion drive the researcher to recommend individual investors that they
should invest in mid caps of the stock exchange that companies that are included in the
mid caps, investors should invest in those firms because those firms have liquid stocks
and they help in predicting the returns of the investors.
In addition to, through the questionnaire approach, researcher will recommend investors
that in order to hedge their investments they should invest in the mutual funds because
mutual funds is a pool of funds and it helps investors to buy and sell securities, stocks,
bonds and money market instruments.
And in Pakistan there is MUFAP that is Mutual Funds Association of Pakistan which help
individual investors to buy stocks, bonds and several other money market instruments
that help them in predicting returns.

These recommendations will help the individual investors to beat the stock market and
then they will get the returns.

62

APPENDIX:
PORTFOLIO ASSESSMENT OF THE STOCKS OVER THE PERIOD OF TWO
YEARS.
Amount Invested= Rs. 100,000 in Arif Habib Ltd

Table
1.1
Arif Habib Ltd

2009

JANUARY
DATE

CLOSE

VOLUME

NO. OF SHARES

1-Jan-09

81.16

100

1232

INVESTMENT
100,00

2-Jan-09

77.11

2,300

1232

95,000

5-Jan-09

73.26

1,000

1232

90,256

6-Jan-09

69.6

8,900

1232

85,747

9-Jan-09

66.12

1,700

1232

81,460

12-Jan-09

62.82

100

1232

77,394

13-Jan-09

59.68

500

1232

73,526

14-Jan-09

56.7

200

1232

69,854

15-Jan-09

53.87

200

1232

66,368

19-Jan-09

51.18

100

1232

63,054

20-Jan-09

48.63

100

1232

59,912

21-Jan-09

46.2

100

1232

56,918

22-Jan-09

43.89

100

1232

54,072

GAIN/LOSS

% GAIN/LOSS

(5,00

(5.00

0
0)

)
(4,74

3)

(4.99
)

(4,50
9)

(5.00
)

(4,28
7)

(5.00
)

(4,06
6)

(4.99
)

(3,86
8)

(5.00
)

(3,67
1)

(4.99
)

(3,48
7)

(4.99
)

(3,31
4)

(4.99
)

(3,14
2)

(4.98
)

(2,99
4)

(5.00
)

(2,84

(5.00

63

6)
23-Jan-09

41.7

200

1232

51,374

26-Jan-09

39.62

100

1232

48,812

27-Jan-09

37.64

37,500

1232

46,372

28-Jan-09

35.76

258,000

1232

44,056

29-Jan-09

33.98

7,000

1232

41,863

30-Jan-09

32.29

5,300

1232

39,781

1232

65,570

)
(2,69

8)

)
(2,56

3)

)
(5.00
)
(2,31

6)

(4.99
)

(2,19
3)

(4.98
)

(2,08
2)

17,026.3

(4.99

(2,43
9)

53.22

(4.99

(4.97
)

(3,34

(4.99

5)

GAIN/LOSS
1,984
2,082
2,181
2,292
2,402
(2,52

% GAIN/LOSS
4.99
4.99
4.97
4.98
4.97
(4.98

6)

Table
1.2
FEBRUARY
DATE

CLOSE

VOLUME

NO. OF SHARES

2-Feb-09

33.9

611,100

1232

3-Feb-09

35.59

385,600

1232

4-Feb-09

37.36

6,800

1232

6-Feb-09

39.22

182,100

1232

9-Feb-09

41.17

756,300

1232

10-Feb-09

39.12

303,200

1232

INVESTMENT
41,765
43,847
46,028
48,319
50,721
48,196

11-Feb-09

38.07

673,800

1232

46,902

12-Feb-09

36.17

154,400

1232

44,561

13-Feb-09

37.97

513,400

1232

16-Feb-09

39.86

262,900

1232

17-Feb-09

41.17

496,600

1232

18-Feb-09

39.37

493,600

1232

46,779
49,108
50,721
48,504

19-Feb-09

39.46

265,400

1232

20-Feb-09

38.69

150,800

1232

48,615
47,666

23-Feb-09

36.76

59,100

1232

45,288

24-Feb-09

34.94

120,900

1232

43,046

(1,29
4)

(2.68
)

(2,34
1)

(4.99
)

2,218
2,328
1,614
(2,21
8)

4.98
4.98
3.29
(4.37
)

111
(94
9)

0.23
(1.95
)

(2,37
8)

(4.99
)

(2,24
2)

(4.95
)

64

25-Feb-09

33.32

26,100

1232

41,050

26-Feb-09

32.81

120,800

1232

40,422

27-Feb-09

34.28

199,300

1232

37.33

304,326

1232

42,233
45,988

1,811
129

4.48
0.41

DATE

CLOSE

VOLUME

NO. OF SHARES

2-Mar-09

35.16

159,300

1232

3-Mar-09

34.11

31,000

1232

INVESTMENT
43,317
42,024

GAIN/LOSS
1,084
(1,29

% GAIN/LOSS
2.57
(2.99

4)

4-Mar-09

35.81

48,500

1232

5-Mar-09

35.79

101,600

1232

44,118
44,093

6-Mar-09

34.48

57,300

1232

42,479

9-Mar-09

32.81

49,400

1232

40,422

11-Mar-09

31.61

26,400

1232

38,944

12-Mar-09

33.1

82,000

1232

13-Mar-09

33.4

47,800

1232

16-Mar-09

35.07

3,500

1232

17-Mar-09

36.82

35,400

1232

18-Mar-09

38.66

66,700

1232

19-Mar-09

40.59

14,700

1232

20-Mar-09

42.61

12,500

1232

24-Mar-09

44.74

11,000

1232

25-Mar-09

46.97

7,400

1232

26-Mar-09

49.31

9,100

1232

27-Mar-09

51.77

462,300

1232

30-Mar-09

54.35

35,200

1232

31-Mar-09

57.06

75,200

1232

40.21

66,815

1232

40,779
41,149
43,206
45,362
47,629
50,007
52,496
55,120
57,867
60,750
63,781
66,959
70,298
49,540

CLOSE

VOLUME

NO. OF SHARES

(1,99
6)

(4.64
)

(62
8)

(1.53
)

Table1
.3
MARCH

2,094
(2
5)

4.98
(0.06
)

(1,61
4)

(3.66
)

(2,05
7)

(4.84
)

(1,47
8)

(3.66
)

1,836
370
2,057
2,156
2,267
2,378
2,489
2,624
2,747
2,883
3,031
3,179
3,339
1,403

4.71
0.91
5.00
4.99
5.00
4.99
4.98
5.00
4.98
4.98
4.99
4.98
4.99
2.64

GAIN/LOSS

% GAIN/LOSS

Table
1.4
APRIL
DATE

INVESTMENT

65

1-Apr-09

59.91

11,700

1232

2-Apr-09

62.9

400

1232

3-Apr-09

66.04

4,200

1232

6-Apr-09

69.34

4,200

1232

7-Apr-09

72.8

243,100

1232

8-Apr-09

76.44

568,200

1232

9-Apr-09

80.24

521,400

1232

10-Apr-09

84.25

221,500

1232

13-Apr-09

88.46

756,300

1232

14-Apr-09

88.27

913,500

1232

15-Apr-09

83.91

415,500

1232

16-Apr-09

79.72

356,000

1232

98,215

17-Apr-09

75.79

190,600

1232

93,373

20-Apr-09

79.57

213,000

1232

21-Apr-09

83.54

71,500

1232

98,030
102,92

4,657
4,891

4.99
4.99

22-Apr-09

79.38

410,200

1232

97,796

(5,12

(4.98

23-Apr-09

75.42

215,300

1232

92,917

24-Apr-09

78.66

557,700

1232

27-Apr-09

74.73

99,400

1232

96,909
92,067

28-Apr-09

71.02

384,500

1232

87,497

29-Apr-09

68.22

319,500

1232

84,047

30-Apr-09

64.87

408,100

1232

79,920

75.61

312,991

1232

93,155

437

0.70

DATE

CLOSE

VOLUME

NO. OF SHARES

18-May-09

73.71

552,500

1232

INVESTMENT
90,811

GAIN/LOSS
10,89

% GAIN/LOSS
13.63

73,809
77,493
81,361
85,427
89,690
94,174
98,856
103,79

3,511
3,684
3,868
4,066
4,263
4,484
4,682
4,940

4.99
4.99
4.99
5.00
4.99
5.00
4.97
5.00

108,98

5,187

5.00

108,74

(23

(0.21

6
3
9

4)
103,37

)
(5,37

2)

(4.94
)

(5,16
2)

(4.99
)

(4,84
2)

(4.93
)

1
5)

)
(4,87

9)

(4.99
)

3,992
(4,84
2)

4.30
(5.00
)

(4,57
1)

(4.96
)

(3,45
0)

(3.94
)

(4,12
7)

(4.91
)

Table
1.5
MAY
1

66

15-May-09

71.51

291,700

1232

88,100

14-May-09

70.85

508,400

1232

87,287

13-May-09

73.82

819,000

1232

12-May-09

71.07

181,600

1232

90,946
87,558

11-May-09

67.69

422,300

1232

83,394

8-May-09

65.34

446,300

1232

80,499

7-May-09

63.97

669,300

1232

78,811

6-May-09

61.47

323,800

1232

75,731

5-May-09

58.55

501,600

1232

72,134

4-May-09

61.63

157,800

1232

19-May-09

70.59

358,900

1232

75,928
86,967

20-May-09

71.31

377,200

1232

21-May-09

67.89

369,600

1232

22-May-09

71.28

427,200

1232

25-May-09

73.17

684,400

1232

26-May-09

73.02

472,700

1232

27-May-09

74.05

365,600

1232

28-May-09

77.75

606,300

1232

29-May-09

76.24

804,800

1232

91,230
95,788
93,928

69.75

467,050

1232

85,926

(2,71
0)

(2.98
)

(81
3)

(0.92
)

3,659
(3,38
8)

4.19
(3.73
)

(4,16
4)

(4.76
)

(2,89
5)

(3.47
)

(1,68
8)

(2.10
)

(3,08
0)

(3.91
)

(3,59
7)

(4.75
)

3,795
11,03

5.26
14.54

887
(4,21

1.02
(4.80

9
87,854
83,640
3)
87,817
90,145
89,961

)
4,176
2,328
(18

5)

4.99
2.65
(0.21
)

1,269
4,558
(1,86
0)

1.41
5.00
(1.94
)

700

0.96

67

Table
1.6
JUNE
DATE

CLOSE

VOLUME

NO. OF SHARES

1-Jun-09

72.43

266,700

1232

INVESTMENT
89,234

2-Jun-09

69.02

229,100

1232

85,033

3-Jun-09

66.37

260,900

1232

81,768

4-Jun-09

64.0867

183,100

1232

78,955

5-Jun-09

63.9995

195,900

1232

78,847

8-Jun-09

65.77

139,700

1232

9-Jun-09

69.05

189,200

1232

10-Jun-09

70.12

341,100

1232

11-Jun-09

71.3

238,300

1232

12-Jun-09

70.88

201,700

1232

81,029
85,070
86,388
87,842
87,324

15-Jun-09

68.04

168,000

1232

83,825

16-Jun-09

66.38

171,400

1232

81,780

17-Jun-09

69.69

203,600

1232

18-Jun-09

70.63

398,700

1232

19-Jun-09

69.45

204,000

1232

85,858
87,016
85,562

22-Jun-09

68.78

90,000

1232

84,737

23-Jun-09

68.74

77,600

1232

84,688

24-Jun-09

67.56

68,100

1232

83,234

25-Jun-09

68.47

213,900

1232

26-Jun-09

68.97

208,100

1232

29-Jun-09

69.13

201,200

1232

30-Jun-09

66.89

78,900

1232

84,355
84,971
85,168
82,408

68.44

196,782

1232

84,322

GAIN/LOSS
(4,69

% GAIN/LOSS
(5.00

4)

)
(4,20

1)

(4.71
)

(3,26
5)

(3.84
)

(2,81
3)

(3.44
)

(10
7)

(0.14
)

2,181
4,041
1,318
1,454
(51
7)

2.77
4.99
1.55
1.68
(0.59
)

(3,49
9)

(4.01
)

(2,04
5)

(2.44
)

4,078
1,158
(1,45
4)

4.99
1.35
(1.67
)

(82
5)

(0.96
)

(4
9)

(0.06
)

(1,45
4)

(1.72
)

1,121
616
197
(2,76
0)

1.35
0.73
0.23
(3.24
)

(52
4)

(0.55
)

68

Table
1.7
JULY
DATE

CLOSE

VOLUME

NO. OF SHARES

1-Jul-09

68.7

120,900

1232

2-Jul-09

71.81

306,100

1232

3-Jul-09

70.18

304,300

1232

6-Jul-09

70.58

273,800

1232

7-Jul-09

71.02

280,000

1232

8-Jul-09

74.57

568,100

1232

9-Jul-09

77.11

1,443,000

1232

10-Jul-09

74.99

588,400

1232

13-Jul-09

78.73

323,600

1232

14-Jul-09

82.39

975,500

1232

15-Jul-09

80.94

446,500

16-Jul-09

78.72

17-Jul-09

INVESTMENT
84,638
88,470
86,462

GAIN/LOSS
2,230
3,832
(2,00

% GAIN/LOSS
2.71
4.53
(2.27

8)

86,955
87,497
91,870
95,000
92,388

493
542
4,374
3,129
(2,61
2)

0.57
0.62
5.00
3.41
(2.75
)

96,995
101,50

4,608
4,509

4.99
4.65

1232

99,718

(1,78

(1.76

227,500

1232

96,983

82.29

677,500

1232

101,38

4,398

4.54

20-Jul-09

81.24

319,000

1232

100,08

(1,29

(1.28

21-Jul-09

80.96

178,172

1232

99,743

22-Jul-09

80.83

249,353

1232

99,583

23-Jul-09

84.46

799,408

1232

104,05

4,472

4.49

24-Jul-09

87.57

876,560

1232

107,88

3,832

3.68

27-Jul-09

91.94

745,024

1232

28-Jul-09

87.35

811,977

1232

113,270
107,61

5,384
(5,65

4.99
(4.99

29-Jul-09

82.99

288,882

1232

30-Jul-09

79.31

1,369,797

1232

4
6)

)
(2,73

5)

(2.74
)

1
8

4)

)
(34

5)

(0.34
)

(16
0)

(0.16
)

5
6

5)
102,24

)
(5,37

2)
97,710

(4.99
)

(4,53
4)

(4.43
)

69

31-Jul-09

80.71

901,784

1232

79.1

568,485

1232

DATE

CLOSE

VOLUME

NO. OF SHARES

3-Aug-09

82.44

987,086

1232

4-Aug-09

81.64

321,556

1232

5-Aug-09

78.74

374,629

1232

97,008

6-Aug-09

79.64

205,141

1232

7-Aug-09

82.95

828,753

1232

98,116
102,19

1,109
4,078

1.14
4.16

10-Aug-09

83.97

565,159

1232

103,45

1,257

1.23

11-Aug-09

83.01

415,530

1232

102,26

(1,18

(1.14

12-Aug-09

81.74

229,016

1232

13-Aug-09

81.26

166,703

1232

100,112

17-Aug-09

79.69

184,898

1232

98,178

18-Aug-09

79.44

148,065

1232

97,870

19-Aug-09

79.83

79,060

1232

20-Aug-09

79.74

87,090

1232

98,351
98,240

21-Aug-09

79.59

194,004

1232

98,055

24-Aug-09

83.56

294,476

1232

102,94

4,891

4.99

25-Aug-09

86.49

347,313

1232

106,55

3,610

3.51

26-Aug-09

85.24

230,437

1232

105,01

(1,54

(1.45

27-Aug-09

82.83

298,744

1232

28-Aug-09

68.31

241,022

1232

99,435
97,456

1,725
740

1.77
0.88

INVESTMENT
101,56

GAIN/LOSS
2,131

% GAIN/LOSS
2.14

(98

(0.97

Table
1.8
AUGUST
6
100,58
0

6)

)
(3,57

3)

(3.55
)

4
1
8

3)
100,70

)
(1,56

5)

(1.53
)

(59
1)

(0.59
)

(1,93
4)

(1.93
)

(30
8)

(0.31
)

480
(111
)

0.49
(0.11
)

(18
5)

(0.19
)

6
6
6

0)
102,04

)
(2,96

9)
84,158

(2.83
)

(17,88

(17.53

70

9)
31-Aug-09

70.34

550,018

1232

80.5

337,435

1232

86,659
99,204

)
2,501
(63

9)

2.97
(0.58
)

71

Table
1.9
SEPTEMBER
DATE

CLOSE

VOLUME

NO. OF SHARES

1-Sep-09

67.92

376,251

1232

INVESTMENT
83,677

GAIN/LOSS
(2,98

% GAIN/LOSS
(3.44

2-Sep-09

68.28

379,065

1232

1)

3-Sep-09

66.69

159,701

1232

4-Sep-09

67.16

273,658

1232

7-Sep-09

66.07

155,691

1232

82,741
81,398

8-Sep-09

64.9

93,313

1232

79,957

9-Sep-09

68.06

455,523

1232

10-Sep-09

66.76

171,116

1232

83,850
82,248

11-Sep-09

67.66

296,697

1232

14-Sep-09

67.39

80,793

1232

83,357
83,024

15-Sep-09

66.87

71,951

1232

82,384

16-Sep-09

66.89

187,623

1232

17-Sep-09

66.81

166,329

1232

82,408
82,310

18-Sep-09

67.96

447,984

1232

24-Sep-09

69.48

685,514

1232

25-Sep-09

70.59

963,179

1232

28-Sep-09

74.05

1,006,106

1232

29-Sep-09

77.45

1,303,612

1232

30-Sep-09

76.49

1,069,782

1232

83,727
85,599
86,967
91,230
95,418
94,236

68.8

439,152

1232

84,780

399

0.47

GAIN/LOSS
(2,42

% GAIN/LOSS
(2.58

7)

84,121
82,162

444
(1,95
9)

0.53
(2.33
)

579
(1,34
3)

0.70
(1.62
)

(1,44
1)

(1.77
)

3,893
(1,60
2)

4.87
(1.91
)

1,109
(33
3)

1.35
(0.40
)

(64
1)

(0.77
)

25
(9
9)

0.03
(0.12
)

1,417
1,873
1,368
4,263
4,189
(1,18
3)

1.72
2.24
1.60
4.90
4.59
(1.24
)

Table
1.10
OCTOBER
DATE

CLOSE

VOLUME

NO. OF SHARES

1-Oct-09

74.52

377,019

1232

INVESTMENT
91,809

2-Oct-09

74.82

488,715

1232

92,178

370

0.40

72

5-Oct-09

74.21

314,805

1232

91,427

6-Oct-09

74.94

269,213

1232

7-Oct-09

78.68

857,936

1232

8-Oct-09

81.47

1,956,031

1232

92,326
96,934
100,37

899
4,608
3,437

0.98
4.99
3.55

9-Oct-09

80.46

914,370

1232

99,127

(1,24

(1.24

12-Oct-09

80.31

575,278

1232

98,942

13-Oct-09

80.51

710,868

1232

14-Oct-09

81.4

915,818

1232

99,188
100,28

246
1,096

0.25
1.11

15-Oct-09

79.79

390,297

1232

98,301

(1,98

(1.98

16-Oct-09

79.69

294,329

1232

98,178

19-Oct-09

75.71

373,284

1232

93,275

20-Oct-09

72.94

786,216

1232

89,862

21-Oct-09

69.3

287,916

1232

85,378

22-Oct-09

66.08

717,791

1232

81,411

23-Oct-09

65.55

277,719

1232

80,758

26-Oct-09

68.75

258,482

1232

27-Oct-09

68.31

373,582

1232

84,700
84,158

28-Oct-09

66.46

165,654

1232

81,879

29-Oct-09

65.06

153,149

1232

80,154

30-Oct-09

68.12

542,865

1232

74.0

545,515

1232

83,924
91,116

(75
2)

(0.82
)

1
4)

)
(18

5)

(0.19
)

5
4)

)
(12

3)

(0.13
)

(4,90
3)

(4.99
)

(3,41
3)

(3.66
)

(4,48
4)

(4.99
)

(3,96
7)

(4.65
)

(65
3)

(0.80
)

3,942
(54
2)

4.88
(0.64
)

(2,27
9)

(2.71
)

(1,72
5)

(2.11
)

3,770
(46
9)

4.70
(0.48
)

73

Table
1.11
NOVEMBER
DATE

CLOSE

VOLUME

NO. OF SHARES

2-Nov-09

64.72

160,216

1232

INVESTMENT
79,735

3-Nov-09

62.82

216,968

1232

77,394

4-Nov-09

65.83

467,083

1232

5-Nov-09

65.05

232,270

1232

81,103
80,142

6-Nov-09

62.85

117,129

1232

77,431

10-Nov-09

59.71

88,980

1232

73,563

11-Nov-09

61.26

161,144

1232

12-Nov-09

61.14

220,258

1232

75,472
75,324

13-Nov-09

62.65

133,878

1232

16-Nov-09

63.22

170,971

1232

17-Nov-09

61.44

216,380

1232

18-Nov-09

62.48

443,948

1232

19-Nov-09

64.63

516,035

1232

20-Nov-09

63.6

278,105

1232

76,975
79,624
78,355

23-Nov-09

61.76

80,964

1232

76,088

24-Nov-09

61.55

81,742

1232

75,830

25-Nov-09

62.52

132,307

1232

26-Nov-09

62.43

46,939

1232

77,025
76,914

62.76

209,184

1232

77,319

GAIN/LOSS
(4,18

% GAIN/LOSS
(4.99

9)

)
(2,34

1)

(2.94
)

3,708
(96
1)

4.79
(1.18
)

(2,71
0)

(3.38
)

(3,86
8)

(5.00
)

1,910
(14
8)

77,185
77,887
75,694

2.60
(0.20
)

1,860
702
(2,19
3)

2.47
0.91
(2.82
)

1,281
2,649
(1,26
9)

1.69
3.44
(1.59
)

(2,26
7)

(2.89
)

(25
9)

(0.34
)

1,195
(111
)

1.58
(0.14
)

(38

(0.44

9)

GAIN/LOSS

% GAIN/LOSS

Table
1.12
DECEMBER
DATE

CLOSE

VOLUME

NO. OF SHARES

INVESTMENT

74

1-Dec-09

60.35

50,236

1232

74,351

2-Dec-09

61.7

173,561

1232

3-Dec-09

62.58

268,730

1232

4-Dec-09

60.25

119,673

1232

76,014
77,099
74,228

7-Dec-09

60.03

42,544

1232

73,957

8-Dec-09

58.96

77,906

1232

72,639

9-Dec-09

58.92

108,747

1232

72,589

10-Dec-09

59.67

56,203

1232

11-Dec-09

59.64

51,252

1232

73,513
73,476

14-Dec-09

61.31

198,758

1232

15-Dec-09

61.18

285,392

1232

75,534
75,374

16-Dec-09

60.8

133,775

1232

74,906

17-Dec-09

60.91

83,034

1232

18-Dec-09

60.26

39,803

1232

75,041
74,240

21-Dec-09

60.88

33,433

1232

22-Dec-09

62.56

382,813

1232

23-Dec-09

61.99

219,919

1232

75,004
77,074
76,372

24-Dec-09

61.45

110,134

1232

75,706

29-Dec-09

60.88

56,928

1232

75,004

30-Dec-09

61.09

158,439

1232

31-Dec-09

60.46

95,084

1232

75,263
74,487

60.76

130,779

1232

74,851

(2,56
3)

(3.33
)

1,663
1,084
(2,87
1)

2.24
1.43
(3.72
)

(27
1)

(0.37
)

(1,31
8)

(1.78
)

(4
9)

(0.07
)

924
(3
7)

1.27
(0.05
)

2,057
(16
0)

2.80
(0.21
)

(46
8)

(0.62
)

136
(80
1)

0.18
(1.07
)

764
2,070
(70
2)

1.03
2.76
(0.91
)

(66
5)

(0.87
)

(70
2)

(0.93
)

259
(77
6)

0.34
(1.03
)

(116
)

(0.14
)

75

Arif Habib Ltd

Table
2.1
JANUARY

2010

DATE

CLOSE

VOLUME

NO. OF SHARES

4-Jan-10

60.58

67,714

1232

5-Jan-10

61.78

327,445

1232

6-Jan-10

61.77

184,187

1232

INVESTMENT
74,635
76,113
76,101

7-Jan-10

61.22

131,090

1232

75,423

8-Jan-10

62.34

244,436

1232

11-Jan-10

62.55

120,305

1232

12-Jan-10

61.58

72,537

1232

76,803
77,062
75,867

13-Jan-10

64.65

268,761

1232

14-Jan-10

67.88

123,761

1232

15-Jan-10

66.83

1,004,040

1232

79,649
83,628
82,335

18-Jan-10

66.31

245,419

1232

81,694

19-Jan-10

65.75

102,300

1232

81,004

20-Jan-10

66.31

461,623

1232

21-Jan-10

69.62

862,882

1232

22-Jan-10

73.1

423,107

1232

25-Jan-10

74.43

1,126,189

1232

26-Jan-10

71.73

556,864

1232

81,694
85,772
90,059
91,698
88,371

27-Jan-10

69.23

401,591

1232

85,291

28-Jan-10

69.83

491,813

1232

29-Jan-10

69.61

1,695,520

1232

86,031
85,760

66.4

445,579

1232

81,749

VOLUME

NO. OF SHARES

GAIN/LOSS
148
1,478
(1

% GAIN/LOSS
0.20
1.98
(0.02

2)

)
(67

8)

(0.89
)

1,380
259
(1,19
5)

1.83
0.34
(1.55
)

3,782
3,979
(1,29
4)

4.99
5.00
(1.55
)

(64
1)

(0.78
)

(69
0)

(0.84
)

690
4,078
4,287
1,639
(3,32
6)

0.85
4.99
5.00
1.82
(3.63
)

(3,08
0)

(3.49
)

739
(27
1)

0.87
(0.32
)

564

0.74

GAIN/LOSS

% GAIN/LOSS

Table
2.2
FEBRUARY
DATE

CLOSE

INVESTMENT

76

1-Feb-10

70.12

211,990

1232

2-Feb-10

68.97

148,177

1232

86,388
84,971

3-Feb-10

67.19

84,179

1232

82,778

4-Feb-10

67.53

66,414

1232

8-Feb-10

66.7

31,192

1232

83,197
82,174

9-Feb-10

66.24

22,982

1232

81,608

10-Feb-10

65.64

35,824

1232

80,868

11-Feb-10

65.67

73,006

1232

12-Feb-10

65.32

62,728

1232

80,905
80,474

15-Feb-10

64.01

70,637

1232

78,860

16-Feb-10

64.87

131,760

1232

17-Feb-10

65.49

104,314

1232

18-Feb-10

66.72

197,813

1232

19-Feb-10

67.27

264,276

1232

22-Feb-10

70.63

290,726

1232

23-Feb-10

70.15

410,171

1232

79,920
80,684
82,199
82,877
87,016
86,425

24-Feb-10

66.85

89,574

1232

82,359

25-Feb-10

65.96

64,452

1232

81,263

26-Feb-10

65.47

13,972

1232

80,659

66.9

124,957

1232

82,401

628
(1,41
7)

0.73
(1.64
)

(2,19
3)

(2.58
)

419
(1,02
3)

0.51
(1.23
)

(56
7)

(0.69
)

(73
9)

(0.91
)

37
(43
1)

0.05
(0.53
)

(1,61
4)

(2.01
)

1,060
764
1,515
678
4,140
(59
1)

1.34
0.96
1.88
0.82
4.99
(0.68
)

(4,06
6)

(4.70
)

(1,09
6)

(1.33
)

(60
4)

(0.74
)

(26

(0.30

8)

GAIN/LOSS
(2,50

% GAIN/LOSS
(3.10

1)

Table
2.3
MARCH
DATE

CLOSE

VOLUME

NO. OF SHARES

1-Mar-10

63.44

47,352

1232

INVESTMENT
78,158

2-Mar-10

62.41

34,272

1232

76,889

3-Mar-10

59.29

120,367

1232

73,045

(1,26
9)

(1.62
)

(3,84

(5.00

77

4)
4-Mar-10

62.25

129,018

1232

5-Mar-10

64.27

91,890

1232

8-Mar-10

65.02

86,167

1232

9-Mar-10

64.54

81,774

1232

76,692
79,181
80,105
79,513

10-Mar-10

63.89

42,512

1232

78,712

11-Mar-10

63.97

62,201

1232

12-Mar-10

65.53

200,021

1232

15-Mar-10

65.09

110,197

1232

78,811
80,733
80,191

16-Mar-10

64.63

49,857

1232

79,624

17-Mar-10

64.24

92,801

1232

79,144

18-Mar-10

63.6

22,638

1232

78,355

19-Mar-10

63.97

121,344

1232

22-Mar-10

63.53

11,838

1232

78,811
78,269

24-Mar-10

66.7

125,524

1232

25-Mar-10

65.93

272,985

1232

26-Mar-10

65.97

51,937

1232

29-Mar-10

64.77

38,782

1232

30-Mar-10

65.02

110,708

1232

31-Mar-10

65.19

74,370

1232

64.2

89,934

1232

)
3,647
2,489
924
(59

1)

4.99
3.24
1.17
(0.74
)

(80
1)

(1.01
)

99
1,922
(54
2)

0.13
2.44
(0.67
)

(56
7)

(0.71
)

(48
0)

(0.60
)

(78
8)

(1.00
)

456
(54
2)

82,174
81,226

0.58
(0.69
)

3,905
(94
9)

81,275
79,797

4.99
(1.15
)

49
(1,47
8)

80,105
80,314
79,142

0.06
(1.82
)

308
209
(1

0.39
0.26
0.01

GAIN/LOSS
1,528
(1,57

% GAIN/LOSS
1.90
(1.93

7)

6)

Table
2.4
APRIL
DATE

CLOSE

VOLUME

NO. OF SHARES

1-Apr-10

66.43

130,276

1232

INVESTMENT
81,842
80,265

2-Apr-10

65.15

295,636

1232

5-Apr-10

68.4

870,091

1232

6-Apr-10

67.47

241,023

1232

84,269
83,123

7-Apr-10

70.84

561,170

1232

87,275

4,004
(1,14
6)

4.99
(1.36
)

4,152

4.99

78

8-Apr-10

70.57

312,343

1232

86,942

9-Apr-10

71.07

206,866

1232

12-Apr-10

69.75

44,273

1232

87,558
85,932

13-Apr-10

68.05

89,693

1232

83,838

14-Apr-10

68.84

56,246

1232

15-Apr-10

69.28

183,538

1232

16-Apr-10

68.93

31,155

1232

84,811
85,353
84,922

19-Apr-10

68.44

165,777

1232

84,318

20-Apr-10

68.5

38,338

1232

21-Apr-10

67.07

47,990

1232

84,392
82,630

22-Apr-10

67.4

63,692

1232

23-Apr-10

66.93

74,894

1232

83,037
82,458

26-Apr-10

66.39

92,147

1232

81,792

27-Apr-10

64.14

175,085

1232

79,020

28-Apr-10

62.91

94,771

1232

77,505

29-Apr-10

62.58

49,311

1232

77,099

30-Apr-10

62.1

34,842

1232

76,507

67.33

175,416

1232

82,949

(33
3)

(0.38
)

616
(1,62
6)

0.71
(1.86
)

(2,09
4)

(2.44
)

973
542
(43
1)

1.16
0.64
(0.51
)

(60
4)

(0.71
)

74
(1,76
2)

0.09
(2.09
)

407
(57
9)

0.49
(0.70
)

(66
5)

(0.81
)

(2,77
2)

(3.39
)

(1,51
5)

(1.92
)

(40
7)

(0.52
)

(59
1)

(0.77
)

(17
3)

(0.20
)

79

Table
2.5
MAY
DATE

CLOSE

VOLUME

NO. OF SHARES

3-May-10

61.17

44,014

1232

INVESTMENT
75,361

4-May-10

63.41

231,822

1232

5-May-10

63.36

91,333

1232

78,121
78,060

6-May-10

62.48

25,457

1232

76,975

7-May-10

61.61

88,028

1232

75,904

10-May-10

61.4

16,051

1232

75,645

11-May-10

61.33

29,393

1232

75,559

12-May-10

60.51

47,740

1232

74,548

13-May-10

60.47

21,744

1232

74,499

14-May-10

60.36

20,231

1232

74,364

17-May-10

57.53

56,231

1232

70,877

18-May-10

57.11

28,660

1232

70,360

19-May-10

55.7

136,201

1232

68,622

20-May-10

54.94

23,488

1232

67,686

21-May-10

54.38

66,245

1232

66,996

24-May-10

52.17

29,496

1232

64,273

25-May-10

49.57

84,733

1232

61,070

26-May-10

50.62

97,817

1232

27-May-10

49.93

152,349

1232

62,364
61,514

28-May-10

47.88

85,149

1232

58,988

GAIN/LOSS
(1,14

% GAIN/LOSS
(1.50

6)

)
2,760
(6

2)

3.66
(0.08
)

(1,08
4)

(1.39
)

(1,07
2)

(1.39
)

(25
9)

(0.34
)

(8
6)

(0.11
)

(1,01
0)

(1.34
)

(4
9)

(0.07
)

(13
6)

(0.18
)

(3,48
7)

(4.69
)

(51
7)

(0.73
)

(1,73
7)

(2.47
)

(93
6)

(1.36
)

(69
0)

(1.02
)

(2,72
3)

(4.06
)

(3,20
3)

(4.98
)

1,294
(85
0)

2.12
(1.36
)

(2,52
6)

(4.11
)

80

31-May-10

45.49

50,585

1232

56,044

56.73

67,941

1232

69,897

(2,94
4)

(4.99
)

(97
4)

(1.45
)

81

Table 2.6
JUNE
DATE

CLOSE

VOLUME

NO. OF SHARES

1-Jun-10

43.22

105,564

1232

INVESTMENT
53,247

2-Jun-10

44.16

272,781

1232

3-Jun-10

46.24

227,523

1232

4-Jun-10

44.61

88,671

1232

7-Jun-10

46.7

97,556

1232

8-Jun-10

46.71

76,626

1232

9-Jun-10

46.25

65,918

1232

57,534
57,547
56,980

10-Jun-10

44.17

40,909

1232

54,417

11-Jun-10

44.42

24,991

1232

14-Jun-10

42.2

56,333

1232

54,725
51,990

15-Jun-10

42.02

30,947

1232

51,769

16-Jun-10

44.12

69,343

1232

17-Jun-10

45.8

51,210

1232

18-Jun-10

44.77

74,788

1232

54,356
56,426
55,157

21-Jun-10

45.05

14,608

1232

22-Jun-10

46.03

49,602

1232

23-Jun-10

45.96

149,747

1232

55,502
56,709
56,623

24-Jun-10

45.08

28,018

1232

55,539

25-Jun-10

45

11,818

1232

55,440

28-Jun-10

43.57

30,956

1232

53,678

29-Jun-10

43.72

14,945

1232

30-Jun-10

44

24,104

1232

44.72

73,044

1232

53,863
54,208
55,093

GAIN/LOSS
(2,79

% GAIN/LO
(4

7)

54,405
56,968
54,960

1,158
2,563
(2,00
8)

2
4
(3
)

2,575
12
(56
7)

4
0
(0
)

(2,56
3)

(4
)

308
(2,73
5)

0
(5
)

(22
2)

(0
)

2,587
2,070
(1,26
9)

5
3
(2
)

345
1,207
(8
6)

0
2
(0
)

(1,08
4)

(1
)

(9
9)

(0
)

(1,76
2)

(3
)

185
345
(8
3)

0
0
(0
)

82

Table
2.7
JULY
DATE

CLOSE

VOLUME

NO. OF SHARES

1-Jul-10

44

4,566

1232

INVESTMENT
54,208
54,393
54,725
55,440
57,337
57,263

2-Jul-10

44.15

7,567

1232

5-Jul-10

44.42

2,988

1232

6-Jul-10

45

8,640

1232

7-Jul-10

46.54

53,437

1232

8-Jul-10

46.48

29,377

1232

9-Jul-10

46.73

40,079

1232

12-Jul-10

46.19

24,997

1232

13-Jul-10

47.33

26,863

1232

14-Jul-10

47.74

31,533

1232

15-Jul-10

48.68

320,672

1232

16-Jul-10

48.09

46,534

1232

58,311
58,816
59,974
59,247

19-Jul-10

47.64

70,504

1232

58,692

20-Jul-10

47.52

363,341

1232

58,545

21-Jul-10

46.58

105,763

1232

57,387

22-Jul-10

46.3

30,726

1232

57,042

23-Jul-10

46.02

93,067

1232

56,697

26-Jul-10

45.35

11,656

1232

55,871

27-Jul-10

45.49

18,715

1232

28-Jul-10

44.81

99,978

1232

56,044
55,206

29-Jul-10

43.83

68,335

1232

53,999

30-Jul-10

44.18

66,941

1232

46.0

69,376

1232

54,430
56,732

GAIN/LOSS
185
333
715
1,897
(7

% GAIN/LO

4)

57,571
56,906

0
0
1
3
(0

308
(66
5)

0
(1
)

1,404
505
1,158
(72
7)

2
0
1
(1
)

(55
4)

(0
)

(14
8)

(0
)

(1,15
8)

(1
)

(34
5)

(0
)

(34
5)

(0
)

(82
5)

(1
)

172
(83
8)

0
(1
)

(1,20
7)

(2
)

431
10

83

0
0

Table
2.8
AUGUST
DATE

CLOSE

VOLUME

NO. OF SHARES

2-Aug-10

43.88

40,129

1232

INVESTMENT
54,060

3-Aug-10

44.08

40,994

1232

4-Aug-10

44.82

373,216

1232

5-Aug-10

43.58

137,623

1232

54,307
55,218
53,691

6-Aug-10

42.23

73,199

1232

52,027

9-Aug-10

40.12

53,089

1232

49,428

10-Aug-10

38.12

140,063

1232

46,964

11-Aug-10

38.47

140,008

1232

12-Aug-10

37.29

41,797

1232

47,395
45,941

13-Aug-10

36.07

47,914

1232

44,438

16-Aug-10

34.27

55,547

1232

42,221

17-Aug-10

32.8

276,342

1232

40,410

18-Aug-10

31.97

94,274

1232

39,387

19-Aug-10

33.56

105,311

1232

20-Aug-10

33.8

428,436

1232

23-Aug-10

32.16

137,362

1232

41,346
41,642
39,621

24-Aug-10

30.56

93,728

1232

37,650

25-Aug-10

29.04

130,818

1232

35,777

26-Aug-10

28.39

84,930

1232

34,976

27-Aug-10

29.11

77,443

1232

30-Aug-10

27.7

112,249

1232

35,864
34,126

31-Aug-10

29.08

161,690

1232

35.50

129,371

1232

GAIN/LOSS
(37

% GAIN/LO
(0

0)

)
246
912
(1,52

8)

0
1
(2
)

(1,66
3)

(3
)

(2,60
0)

(5
)

(2,46
4)

(4
)

431
(1,45
4)

0
(3
)

(1,50
3)

(3
)

(2,21
8)

(4
)

(1,811
)

(4
)

(1,02
3)

(2
)

1,959
296
(2,02
0)

4
0
(4
)

(1,97
1)

(4
)

(1,87
3)

(4
)

(80
1)

(2
)

887
(1,73
7)

2
(4
)

35,827
43,742

1,700
(84
6)

4
(1
)

84

Table
2.9
SEPTEMBER
DATE

CLOSE

VOLUME

NO. OF SHARES

1-Sep-10

27.72

90,942

1232

INVESTMENT
34,151

2-Sep-10

27.89

22,012

1232

3-Sep-10

27.77

29,728

1232

6-Sep-10

28.26

25,155

1232

7-Sep-10

28.12

15,051

1232

8-Sep-10

29.11

66,236

1232

9-Sep-10

29.33

41,116

1232

14-Sep-10

30.76

117,358

1232

15-Sep-10

32.24

187,727

1232

16-Sep-10

32.56

159,262

1232

17-Sep-10

33.23

71,020

1232

20-Sep-10

33.56

72,883

1232

21-Sep-10

33.1

69,649

1232

35,864
36,135
37,896
39,720
40,114
40,939
41,346
40,779

22-Sep-10

31.8

75,512

1232

39,178

23-Sep-10

31.68

75,047

1232

39,030

24-Sep-10

27.32

43,792

1232

33,658

27-Sep-10

27

56,641

1232

33,264

28-Sep-10

27.08

32,067

1232

29-Sep-10

27

16,323

1232

33,363
33,264

30-Sep-10

26.21

35,831

1232

32,291

29.59

65,168

1232

36,451

GAIN/LOSS
(1,67

% GAIN/LO
(4

6)

34,360
34,213

209
(14
8)

0
(0
)

34,816
34,644

604
(17
2)

1
(0
)

1,220
271
1,762
1,823
394
825
407
(56
7)

3
0
4
4
0
2
0
(1
)

(1,60
2)

(3
)

(14
8)

(0
)

(5,37
2)

(13
)

(39
4)

(1
)

99
(9
9)

0
(0
)

(97
3)

(2
)

(17
7)

(0
)

85

Table
2.10
OCTOBER
DATE

CLOSE

VOLUME

NO. OF SHARES

1-Oct-10

26

20,559

1232

INVESTMENT
32,032

4-Oct-10

25.94

14,026

1232

31,958

5-Oct-10

24.94

49,364

1232

30,726

6-Oct-10

25.03

38,240

1232

7-Oct-10

26.16

92,636

1232

8-Oct-10

26.3

63,847

1232

11-Oct-10

26.07

34,472

1232

30,837
32,229
32,402
32,118

12-Oct-10

25.24

33,419

1232

31,096

13-Oct-10

25.79

32,764

1232

14-Oct-10

26.03

86,366

1232

15-Oct-10

25.96

44,175

1232

31,773
32,069
31,983

18-Oct-10

26.62

128,711

1232

19-Oct-10

26.77

61,169

1232

20-Oct-10

26.55

23,714

1232

21-Oct-10

27.43

113,706

1232

22-Oct-10

27.85

198,924

1232

25-Oct-10

28.36

207,352

1232

26-Oct-10

26.95

263,969

1232

33,794
34,311
34,940
33,202

27-Oct-10

25.92

110,271

1232

31,933

28-Oct-10

25.51

83,047

1232

31,428

29-Oct-10

25.27

67,154

1232

31,133

26.22

84,185

1232

32,307

GAIN/LOSS
(25

% GAIN/LO
(0

9)

)
(7

4)

(0
)

(1,23
2)

(3
)

111
1,392
172
(28
3)

0
4
0
(0
)

(1,02
3)

(3
)

678
296
(8
6)

2
0
(0
)

32,796
32,981
32,710

813
185
(27
1)

2
0
(0
)

1,084
517
628
(1,73
7)

3
1
1
(4
)

(1,26
9)

(3
)

(50
5)

(1
)

(29
6)

(0
)

(5
5)

(0
)

86

Table
2.11
NOVEMBER
DATE

CLOSE

VOLUME

NO. OF SHARES

1-Nov-10

25.03

50,847

1232

INVESTMENT
30,837

GAIN/LOSS
(29

% GAIN/LO
(0

2-Nov-10

24.89

216,092

1232

30,664

6)

3-Nov-10

24.53

70,157

1232

30,221

4-Nov-10

24.9

33,442

1232

5-Nov-10

25.44

102,632

1232

8-Nov-10

26.28

147,919

1232

10-Nov-10

26.09

107,949

1232

30,677
31,342
32,377
32,143

11-Nov-10

27.18

361,553

1232

12-Nov-10

26.5

84,490

1232

15-Nov-10

26.91

42,067

1232

16-Nov-10

26.85

103,211

1232

22-Nov-10

26.9

53,281

1232

23-Nov-10

26.95

57,363

1232

24-Nov-10

27.18

244,847

1232

25-Nov-10

27.39

84,531

1232

26-Nov-10

26.84

59,719

1232

33,141
33,202
33,486
33,744
33,067

29-Nov-10

26.61

30,831

1232

32,784

30-Nov-10

26.64

58,323

1232

26.28

106,070

1232

32,820
32,382

37
94

0
0

GAIN/LOSS
(65

% GAIN/LO
(1

3)

(17
2)

(0
)

(44
4)

(1
)

456
665
1,035
(23
4)

1
2
3
(0
)

33,486
32,648

1,343
(83
8)

4
(2
)

33,153
33,079

505
(7
4)

1
(0
)

62
62
283
259
(67
8)

0
0
0
0
(2
)

(28
3)

(0
)

Table
2.12
DECEMBER
DATE

CLOSE

VOLUME

NO. OF SHARES

1-Dec-10

26.11

35,457

1232

INVESTMENT
32,168

2-Dec-10

26.04

38,103

1232

32,081

(8

87

(0

6)
3-Dec-10

26.48

38,169

1232

6-Dec-10

26.41

31,791

1232

32,623
32,537

7-Dec-10

26.12

17,359

1232

32,180

8-Dec-10

26.03

35,759

1232

32,069

9-Dec-10

25.1

81,952

1232

30,923

10-Dec-10

25.08

39,362

1232

30,899

13-Dec-10

26.33

61,914

1232

14-Dec-10

27.06

140,683

1232

15-Dec-10

26.23

91,506

1232

32,439
33,338
32,315

20-Dec-10

26.35

32,204

1232

21-Dec-10

26.36

70,845

1232

22-Dec-10

26.12

21,485

1232

32,463
32,476
32,180

23-Dec-10

26.1

29,345

1232

32,155

24-Dec-10

26.37

47,603

1232

27-Dec-10

27.43

121,816

1232

28-Dec-10

26.65

179,864

1232

32,488
33,794
32,833

29-Dec-10

26.44

43,676

1232

32,574

30-Dec-10

26.38

63,848

1232

32,500

31-Dec-10

26.01

35,602

1232

32,044

26.25

59,921

1232

32,337

)
542
(8

6)

)
(35

7)

)
)
)

(0
)

1,540
899
(1,02
3)

4
2
(3
)

148
12
(29
6)

0
0
(0
)

(2
5)

(0
)

333
1,306
(96
1)

1
4
(2
)

(25
9)

(0
)

(7
4)

(0
)

(45
6)

(1
)

(3
7)

2009

(3

(2
5)

MONTHS

(0

(1,14
6)

ENGRO

(1

(111
)

Table 3.0
MEANS

1
(0

(0
)

2010

88

january
february
march
april
may
june
july
august
september
october
november
december
SUM
AVG

1.29
-0.43
1.5
-0.37
0.36
-0.38
0.25
0.36
1.21
-0.38
0.53
0.06
4
0.33

0.24
-0.25
0.45
-0.02
-0.63
0.04
0.45
-0.41
0.02
0.01
0.23
0.29
0.42
0.04

Table 4.0
ATRL
MONTHS
january
february
march
april
may
june
july
august
september
october
november
december
AVG

january
february
march
april
may
june
july
august
september
october
november
december

2009
-0.9
1
2.1
1.8
0.2
-0.1
0.9
0
0.3
-1.1
1.2
-0.4
0.42
OGDCL
2009
-0.11
1.04
1.36
0.16
0.3
0.04
0.45
0.11
-0.01
-0.14
0.17
0.19

2010
-0.8
-0.3
0.2
-0.2
-0.9
-0.4
0.6
-0.6
0
1.1
1.7
-0.3
0.01

2010
-2.16
0.07
0.47
0.15
-0.08
0.35
0.33
-0.24
-0.93
0.26
0.32
0.23

89

AVG

0.30

-0.10

january
february
march
april
may
june
july
august
september
october
november
december
AVG

JSIL
2009
(3.08)
(1.86)
0.96
(1.02)
1.35
(0.54)
(0.52)
(0.50)
2.17
(1.20)
(0.38)
0.11
(0.38)

2010
(0.11)
(0.99)
(1.10)
(0.95)
(0.09)
0.71
0.27
(1.05)
(0.28)
0.22
0.89
(0.10)
(0.22)

90

january
february
march
april
may
june
july
august
september
october
november
december
AVG

ARIF HABIB
2009
-4.99
0.41
2.64
0.7
0.96
-0.55
0.88
-0.58
0.47
-0.48
-0.44
-0.14
-0.09

2010
0.74
-0.3
0.01
-0.2
-1.45
-0.11
0.03
-1.83
-0.44
-0.15
0.31
-0.09
-0.29

91

CODE BOOK
Q1
Q2
Q3
Q4
Q5
Q6

Q7

Q8
a
Q8
b
Q8
c
Q9
Q1
0

Education
stock
investment
first time
Years of
experience
financial
investment
amount
objective of
investment
Time frame
to reach
your
financial
goal
trading
decisions
based on
historical
data
financial
statements
technical
analysis
equity risk
models
source of
funds
important
for investor

1= primary, 2=secondary, 3= graduate, 4= post graduate

1=yes, 2= no
1= 1 year or less, 2= 2-4 years, 3=5 years and above
1= less than Rs. 100,000, 2=Rs. 100,000-250,000, 3=Rs. 250,000-500,000, 4= Rs. 500,000 and

1=generate income, 2=capital protection, 3=long term inflation, 4=consistency, 5= increase liqu
1= 1year or less, 2= 2-5 years, 3= 10 years, 4= 11-15 years, 5= 16 years or longer

1= highly disagree, 2= somewhat agree, 3= neutral, 4= disagree, 5= strongly disagree

1= yes, 2= no
1= yes, 2= no
1= yes, 2= no

1= borrowed money, 2= loans through personal channels, 3= own investment, 4= personal loan

1= investment knowledge skills, 2= long term horizons, 3=investing in small caps, 4= historic da
5= large amount of invested money

CODING
q1
2
2
3
2
3
4
2
3
2
3
3
4
2
1

q2
3
1
3
0
2
2
3
0
2
0
2
0
0
2

q3
3
1
4
1
3
1
4
3
3
2
2
2
1
3

q4
2
2
2
5
1
1
5
2
5
1
2
2
1
2

q5
2
1
2
1
2
2
3
2
2
1
1
2
1
3

q6
2
3
2
1
3
3
3
3
2
1
5
2
1
5

q7
4
4
4
3
3
2
1
2
1
3
4
4
1
1

92

4
1
2
3
3
3
4
2
2
3
3
3
1
1
1
1
1
1
1
2
1
3
1
1
3
2
1
3
2
1
2
3
3
2
3
3
1
3
2
1
3
3
2
2
2
1
1
1
1
2

0
0
3
0
1
2
2
1
2
3
2
1
1
2
2
3
3
3
2
1
3
2
1
3
1
1
2
1
1
2
2
1
3
0
3
0
2
2
1
3
1
2
1
2
2
1
1
0
3
0

3
1
4
3
1
2
1
1
3
2
2
1
1
2
2
4
3
4
3
2
4
2
2
3
1
1
2
1
3
2
1
1
3
2
2
3
1
1
4
2
2
1
1
1
2
1
2
2
3

2
2
4
1
4
1
3
1
1
5
5
2
2
3
3
4
3
2
2
1
1
1
4
3
2
2
3
2
5
5
5
2
5
1
3
4
4
5
2
4
2
2
1
1
1
2
1
1
1
4

2
1
3
4
3
3
4
1
2
3
2
2
2
5
5
3
3
4
1
2
2
2
1
4
2
2
4
2
3
3
2
2
4
2
4
3
2
2
1
5
1
3
1
1
1
1
2
2
2
5

2
5
3
3
4
4
3
1
3
3
3
2
2
5
5
2
2
1
1
2
2
2
1
1
1
1
5
4
5
5
5
2
3
3
3
4
2
4
3
3
3
1
5
2
3
5
4
4
3
2

3
4
1
1
1
2
1
4
4
4
4
4
5
2
3
4
1
4
5
1
4
3
5
1
4
4
4
3
5
5
4
3
2
2
4
4
4
5
5
3
5
4
4
1
2
1
5
1
4
1

93

2
1
3
3
2
3
2
3
2
1
3
3
3
3
3
1
3
3
3
3
3
2
3
3
1
3
3
4
1
2
2
3
1
3
3
2
2
2
3
2
3
2
2
2
2
3
3
1
1
1

3
0
3
3
0
3
2
3
1
1
1
1
1
3
2
1
3
2
1
1
1
1
1
3
2
1
1
3
3
3
1
1
2
3
3
2
2
2
3
3
2
2
2
1
1
3
2
2
2
5

2
2
2
2
1
2
3
2
1
1
2
2
3
1
3
1
4
2
1
2
2
2
2
4
1
1
1
2
2
2
1
3
1
2
3
3
4
4
4
3
2
1
1
2
2
4
2
1
2
4

2
4
2
4
1
1
3
5
2
1
4
5
2
2
1
2
5
4
3
3
4
5
5
4
2
4
4
2
3
2
2
2
2
2
3
2
2
4
5
4
2
2
1
2
1
5
3
2
2
1

5
5
5
5
3
4
2
3
4
1
2
1
1
1
1
2
2
2
1
1
1
2
1
5
2
1
1
2
3
2
1
1
1
4
1
2
4
4
3
3
2
2
1
1
2
2
1
1
1
5

2
4
4
3
3
3
5
3
2
3
5
3
4
5
1
1
1
2
1
1
3
1
1
3
5
1
1
3
3
3
2
4
4
1
2
2
4
5
3
2
4
4
2
3
3
3
5
4
4
3

3
1
4
1
1
4
1
3
1
1
4
1
3
1
4
3
2
4
1
3
4
1
3
4
1
3
2
4
3
1
1
2
1
1
1
0
4
3
4
1
3
4
5
4
3
5
4
1
2
3

94

1
2
1
3
2
2
1
2
3
3
2
1
2
3
2
2
2
3
2
3
3
1
2
2
2
1
1
3
1
2
3
3
2
2
2
3
3
1
2
3
3
3
1
3
1
2
2
3
2
3

2
1
0
0
1
0
0
0
2
2
1
2
1
2
2
2
2
3
1
1
2
1
3
2
1
2
1
3
2
2
3
1
1
3
1
2
2
3
2
2
2
2
1
3
2
2
2
3
2
3

2
1
3
2
3
1
1
1
1
1
1
1
4
3
3
1
1
4
2
1
1
4
3
2
2
1
1
2
1
4
3
2
3
3
1
2
3
4
3
2
2
2
4
3
3
3
3
4
3
2

2
2
1
2
3
3
2
1
1
1
1
1
4
2
2
2
2
4
1
5
5
3
4
1
4
1
4
2
1
2
2
2
2
2
2
1
3
2
4
2
2
2
2
4
3
3
4
4
2
3

5
1
1
5
2
2
2
1
2
1
1
1
5
2
2
1
1
3
1
1
1
1
2
2
5
1
1
1
1
2
3
2
1
1
2
3
4
3
2
2
3
2
3
2
2
2
2
3
2
3

4
2
2
3
1
5
2
2
2
1
3
2
4
2
5
3
3
2
4
3
3
5
4
2
3
2
1
1
1
1
2
3
2
1
4
5
4
1
3
2
1
1
1
4
4
4
1
2
1
2

2
1
4
1
4
1
4
1
3
1
4
4
2
3
1
1
4
3
4
4
4
1
4
2
4
1
1
3
4
1
2
4
2
3
5
4
3
1
5
5
5
5
5
4
5
5
5
5
3
5

95

3
2
3
3
2
2
3
2
3
3
4
1
2
4
3
2
2
2
4
3
3
2
2
4
1
2
2
2
2
1
4
2
4
4
2
2
2
1
1
1
4
4
2
1
1
2
1
1
1
1

3
1
2
2
2
3
2
2
3
1
4
2
1
1
2
2
3
2
1
2
1
2
2
2
2
1
3
2
2
3
3
1
1
2
1
3
2
2
2
3

3
1
2
2
2
4
2
3
1
1
4
2
3
2
1
2
3
2
3
4
2
1
1
1
2
1
1
1
1
1
3
2
1
4
4
3
4
3
3
2
4
4
2
3
2
3
3
3
2
4

4
2
2
2
2
4
2
2
2
1
2
1
4
1
2
2
4
2
3
2
2
2
2
3
1
2
3
2
2
2
2
2
3
1
2
1
2
5
5
2
4
3
2
4
2
2
5
2
2
2

3
1
1
1
2
3
2
2
2
1
4
2
2
2
2
2
3
2
2
3
2
1
1
5
1
1
2
1
5
1
2
1
1
3
2
2
3
4
4
3
3
2
2
3
2
2
2
3
2
2

2
2
3
2
1
2
1
2
2
2
2
1
1
1
4
1
3
3
2
2
1
4
3
1
5
2
1
5
5
5
2
4
4
2
1
4
2
1
1
2
1
2
2
2
2
4
1
2
4
5

4
5
3
4
2
4
5
4
4
4
4
5
4
4
4
5
5
4
4
1
1
4
1
2
2
1
1
1
3
5
5
3
2
4
5
1
1
1
5
5
1
4
4
4
2
4
5
5
5
4

96

1
2
2
3
3
3
3
3
3
3
3
3
3
2
2
2
2
1
4
1
2
2
1
3
4
3
3
3
1
4
1
1
4
2
2
3
3
2
3
4
3
2
3
4
2
4
4
3
3
2

3
3
3
3
2
3
3
3
2
3
3
2
1
2
2
2
2
1
2
2
2
2
3
2
3
3
2
0
0
0
2
0
2
3
3
3
2
3
1
3
2
3
2
2
2
1
2
3
3

4
4
3
4
4
2
4
4
3
4
3
3
2
1
3
3
3
2
3
1
1
2
1
2
3
2
3
3
0
1
1
1
3
2
4
2
3
3
4
2
4
3
2
2
2
1
2
1
2
2

2
2
2
3
2
2
2
4
2
3
1
4
2
2
3
5
2
5
4
3
5
4
2
2
2
4
1
2
2
1
3
5
3
2
4
2
3
5
5
5
4
4
2
2
2
1
3
1
1
2

2
4
2
3
2
3
3
3
2
4
3
2
2
1
2
1
2
2
4
5
5
2
1
4
4
4
4
4
3
1
5
2
2
2
4
3
1
1
5
2
4
1
2
2
2
1
1
2
1
3

1
2
1
3
2
4
1
1
3
3
1
5
3
4
2
4
5
5
1
1
5
2
2
4
1
4
4
4
1
4
1
1
2
2
2
2
2
3
4
4
5
2
2
2
2
2
2
1
1
4

3
4
2
4
4
5
5
4
5
3
2
5
5
5
3
5
5
3
4
3
3
3
4
4
5
3
4
4
5
2
3
4
4
4
3
5
5
5
5
2
3
5
3
3
2
1
3
2
3
4

97

2
1
1
2
4
1
1
2
1
2
1
4
2
3
4
1
1
2
3
2
3
1
2
3
1
3
2
2
2
2
2
2
1
1
3
3
2
3
2
2
2
1
1
2
2
3
3
3
3
2

2
1
1
2
2
1
1
2
2
2
1
0
2
3
0
2
3
2
2
1
2
0
0
3
1
3
2
3
2
3
3
2
2
2
3
3
2
3
2
2
3
1
3
3
2
3
2
1
2
2

2
1
3
3
3
3
1
2
1
1
1
1
2
4
2
1
4
2
1
1
2
1
1
2
1
4
2
4
2
4
3
3
1
3
1
2
3
4
3
2
3
1
4
1
2
3
2
3
2

2
5
5
2
5
3
1
1
2
2
2
2
2
4
2
1
2
2
2
1
4
1
1
2
5
2
2
4
5
4
4
4
2
2
1
2
2
5
5
2
3
1
5
3
2
5
3
1
3
5

2
1
1
2
4
1
1
2
4
1
1
1
1
2
2
2
3
4
2
1
3
1
1
3
1
2
2
5
5
4
4
5
2
1
2
4
1
4
2
2
4
1
5
2
2
4
3
2
2
4

3
1
4
3
1
4
1
2
2
1
1
1
1
4
2
2
2
3
1
1
5
4
1
5
1
3
1
3
2
3
4
4
4
2
2
3
4
3
2
3
4
4
5
4
4
3
4
2
2
3

4
5
5
2
3
5
5
3
4
3
5
3
5
5
3
3
4
3
3
1
5
3
3
5
5
3
1
2
4
3
1
3
5
3
3
4
3
1
3
5
1
4
3
3
1
5
3
1
4
3

98

4
2
3
3
2
2
4
4
2
3
4
3
4
3
3
3
1
3
4
4
2
4
4
1
3
4
1
1
2
2
4
3
4
2
2
2
4
4
3
4
4
3
2
3
3
3
1
3
3

1
1
3
2
2
2
1
3
1
2
2
2
2
3
3
3
2
2
2
1
1
2
3
1
3
3
3
2
2
2
2
1
3
2
2
1
2
0
3
3
2
2
3
2
3
2
2
3
3
3

3
2
4
3
1
1
1
1
3
1
1
3
1
1
2
1
1
2
2
2
2
1
2
2
3
4
2
2
1
1
3
1
2
3
3
3
3
4
4
4
2
4
2
3
2
2
1
4
2
2

5
2
4
2
3
2
1
1
5
5
1
2
1
2
4
2
1
2
2
2
2
2
2
2
2
2
4
2
2
2
1
2
2
4
5
5
5
5
5
2
2
2
4
2
1
1
2
2
2
5

4
1
3
4
1
1
1
3
1
1
1
2
2
3
1
1
1
1
4
1
1
2
2
2
2
3
3
1
1
2
1
2
2
5
4
1
3
5
2
2
2
2
2
2
1
2
1
4
2
3

4
4
4
3
5
3
3
3
4
4
3
4
1
5
1
1
1
1
1
2
3
2
2
3
4
3
3
4
1
4
1
1
4
5
4
3
4
3
3
1
1
3
2
2
1
2
3
2
2
4

3
4
1
1
2
3
2
3
5
3
3
5
5
1
1
2
1
1
5
4
3
4
5
5
4
3
4
5
5
4
4
4
2
4
5
4
5
5
5
4
5
4
5
4
2
5
4
4
3
5

99

2
2
2
1
3
2
3
3
3
2
3
2
2
3
3
2
3
3
3
3

2
2
0
3
3
2
1
2
2
3
2
2
0
2
2
1
3
1
2

1
1
1
4
4
1
1
3
4
1
2
3
2
1
3
1
4
4
3
3

2
5
1
2
2
2
2
2
5
2
2
1
1
2
2
2
2
2
2
2

1
1
1
4
2
2
2
2
2
3
1
1
2
2
1
1
1
3
2
3

4
2
4
2
4
4
4
4
4
4
3
3
4
2
3
1
2
5
3
1

4
5
1
4
2
5
1
2
1
5
1
3
4
5
5
5
2
3
5
5

100

Questionnaire on Individual Investors

Question 1)
Education level:
Primary

Graduate

post graduate

Secondary

Question 2)
I have _________________ years of stock investment experience in the
KSE.
1year or less

2-4 years

5 years and above

Question 3)
My investment in the financial instrument of Stock Exchange:
Less than Rs.100,000
Rs. 250,000- 500,000

Rs. 100,000-250,000
Rs. 500,000 and above

Question 4)
Prior to investing in a particular company, I prefer (tick any one of the
following)
Past performance of the company.
Liquidity of the company.
Risk management strategy of the company in the time of inflation.
To attain high degree of stability and predictability of my investment return
over time.
Financial stability of the company.

101

Question 5)
What is the time frame to reach your financial goal?
1 year or less
11-15 years

2-5 years
6-10 years
16 years or longer

Question 6)
Your trading decisions are based on historical data?
Highly agree

somewhat agree

Disagree
Strongly disagree

Neutral

Question 7)
Why individual investors do not get sufficient returns in the stock
market?
(Tick any one of the following)
Proper knowledge about the company
Lack of investment knowledge

financial stability of the investors

Historical data misleads

Economic uncertainties

102

BIBLIOGRAPHY
http://www.karachistockexchange.org/2010/10/karachi-stock-exchange-weeklyanalysis.html
Historical data was taken from www.KSE.com.pk
http://vuhelp.net/pakistan-stock-exchange/1758-daily-karachi-stock-exchange-kse-100trend-review-30-august-2010-a.html
www.ogdcl.com.pk
www.arifhabibltd.com.pk
www.engro.com.pk
www.jsil.com.pk
www.atrl.com.pk
http://www.my3q.com/survey/357/wingirlove/1234.phtml
http://www.my3q.com/survey/55/amansri/78988.phtml
http://www.my3q.com/home2/319/icl_fdww/52087_viewData.phtml?record=12
http://my3q.com/home/glok/funds_viewData.phtml?record=51
http://www.spireframe.com/article/liquidity.aspx
103

References
[1] Research Paper Differences in Herding Behavior-institutional investors vs.
individual investors in China by Steven Shuye in 2009.
[2] [3] Research paper Individual Investors and Option Trading by Christof Beuselinck in
2010.

[4] Research paper Is Market Manipulation Bad? by Omri Yardlin

[5] Research paper Market Manipulation and the role of Regulators

[6] Research paper Individual Investors and trading

[7] Investors Sentiments

[8] Dawn Newspaper of January 2011.

[9] Book by Ellis, The Elements of Investing, pg35

[10] Can Individual Investors Beat the market

[11] Business Week magazine.

[12] Can Individual Investors beast the Market?

[13] Investors sentiments and the stock returns.

104

[14] Market Liquidity and the Expected Stock Returns.

105