Macedonian Small Investors’ Behavior Towards Stock Market

Angelovska, Julijana

doi:10.1515/zireb-2015-0003

Cited by 3 publications

(4 citation statements)

References 17 publications

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“…Sentana and Wadhwani (1992) report the existence of such a trading strategy in the American market in the nineteenth century. In recent times, studies by Angelovska (2013), Belhoula and Naoui (2011), Reitz (2006), Bonser-Neal et al (2002), Hsieh, Tai and Vu (2008), Oh et al (2008), Richards (2005) and Tayde and Rao (2011) document positive feedback trading strategies among foreign investors.…”

Section: Literature Reviewmentioning

confidence: 98%

“…A review of the literature shows that the existing evidence on the subject matter solely focuses on the developed markets (Belhoula & Naoui, 2011;Bohl & Reitz, 2006;Chau et al, 2011;Chen & Mcmillan, 2020;DeLong et al, 1990;Edelen & Warner, 2001;Li, 2021;Sentana & Wadhani, 1992;Watson & Wickramanayake, 2012) and other emerging markets outside Africa (Angelovska, 2013;Baba & Sevil, 2021;Batra, 2003;Bikhchandani & Sharma, 2001;Bonser-Neal et al, 2002;Chauhan & Chaklader, 2020;Chhimwal & Bapat, 2020;Choe et al, 1999;Dai & Yang, 2018;Gerlach & Yook, 2016;Hsieh et al, 2008;Kadanda & Raj, 2017;Khanthavit, 2020;Kim & Wei, 2002;Oh et al, 2008;Richards, 2005;Tayde & Rao, 2011). There is a paucity of research on positive feedback trading in the African market, and specifically the Nigerian market.…”

Section: Literature Reviewmentioning

confidence: 99%

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A Test of Positive Feedback Trading among Foreign Portfolio Investors in Nigeria

Abdulkadir

2023

GADJAH MADA INT. J. BUS.

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It has been established in the literature that the trading behavior of international investors may increase market vulnerability, especially for emerging markets. Consequently, this study examines whether positive feedback trading exists in the Nigerian stock market. Both descriptive and inferential analyses are carried out on monthly data covering the period 2013 to 2020. Specifically, the ARDL bounds testing approach is employed. Findings indicate that positive feedback trading exists in the market, as stock returns have positive and significant influence on foreign portfolio inflows. The results further show that this trading pattern becomes more prominent with rising economic growth. The findings again reveal that the exchange rate and the interest rate explain the foreign portfolio inflows in the Nigerian market. The study’s outcomes lend support for the pull theory in explaining the foreign portfolio inflow. However, no evidence is found in support of the push theory, as an explanation for the foreign portfolio inflow as the “OPEC basket crude oil price” is insignificant. It is thereby recommended that regulators should adopt measures that will help foreign investors to be better informed about the Nigerian market, in order to reduce their positive feedback trading behavior. Moreso, there is a need for the government to put in place policies targeted toward enhancing the growth of the stock market and the economy. In this way, the negative impact of such trading behavior will be minimal, as short-term trading by foreign investors will be reduced and the foreign portfolio inflows will be sustainable.

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Section: Literature Reviewmentioning

confidence: 98%

Section: Literature Reviewmentioning

confidence: 99%

A Test of Positive Feedback Trading among Foreign Portfolio Investors in Nigeria

Abdulkadir

2023

GADJAH MADA INT. J. BUS.

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“…A similar result is also observed by Bohl and Reitz (2002): a substantial percentage of investors in the German stock market pursue PFT, which induces negative return autocorrelation when periods are characterized by high volatility. However, Angelovska (2013) observes that in small emerging stock markets, high volatility is followed by positive autocorrelation and a positive feedback strategy. Based on the premise that trading volumes are perceived to provide vital hints to forecast future stock price movements, Miwa and Ueda (2011) infer that in the US market, volume-return relations can be attributed to not only the gradual incorporation of fundamental information but also short-term PFT by investors.…”

Section: Review Of Literaturementioning

confidence: 99%

Feedback Trading and Its Implications for Return Autocorrelations in India During COVID

Mukherjee,

Chatterjee

2024

Journal of Emerging Market Finance

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In emerging capital markets, feedback trading is a widely pursued strategy by investors. Such behavior may potentially lead to volatility and cause negative autocorrelation in market returns, especially during high volatility. In India, such a linkage has not been explored so far, though institutional investors have pursued feedback trading for the last two decades. Also, COVID-19 has led to higher volatility in the markets and might have altered investors’ behavior. This article focuses on finding whether feedback trading is still pursued by institutional investors in Indian equity markets post-COVID and also whether the presence of feedback traders exerts any influence on autocorrelations in market returns. Asymmetric GARCH models are employed to explore the linkage. Findings suggest that while foreign institutional investors continue to pursue positive feedback trading, as in the pre-pandemic period, domestic investors pursue negative feedback trading. However, in the post-pandemic period, as other types of trading became weak or perished, positive feedback traders have started dominating, leading to negative autocorrelation in market returns during heightened volatility. Evidence of negative autocorrelation was not present in the pre-pandemic period. Further, negative news leads to more volatility in returns. JEL Codes: F21, F32, G11

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“…They observed "the predominance of conservative and moderate profiles" and confirmed the occurrence of "risk aversion in the field of gains and risk propensity in the field of losses" among students in the sample. Angelovska (2015) sought to determine if the behaviour of individual investors in the stock market could be explained by factors related to the behavioural approach of financial market studies. She used convenience sampling and descriptive statistics.…”

Section: Empirical Studiesmentioning

confidence: 99%

Do Accounting and Finance Master’s Students Apply Prospect Theory?

Alves

2020

Rev. CEA

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This study aims to question the assumptions of prospect theory using a sample of students enrolled in a master’s course on accounting and finance at a Portuguese polytechnic institution. Such theory has stood out among others developed in the field of Behavioural Finance due to the debate and investigation it has generated. To achieve this aim, we applied a questionnaire four consecutive years (2012–2015). The instrument included a set of alternative response questions that seek to unveil respondents’ preferences regarding the situations they were presented with. Bibliographic and descriptive research was carried out and the results were compared with those obtained by other authors but they were not always consistent. Thus, the isolation effect was confirmed; the reflection effect was almost always confirmed; and the certainty effect was not always confirmed. Regarding attitude toward risk, the assumptions of risk aversion, and importance given to changes in wealth (at the expense of wealth states), our results are in line with those obtained by said authors. Hence, this study contributes to support prospect theory with its results and the confirmation of the isolation effect.

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Macedonian Small Investors’ Behavior Towards Stock Market

Cited by 3 publications

References 17 publications

A Test of Positive Feedback Trading among Foreign Portfolio Investors in Nigeria

A Test of Positive Feedback Trading among Foreign Portfolio Investors in Nigeria

Feedback Trading and Its Implications for Return Autocorrelations in India During COVID

Do Accounting and Finance Master’s Students Apply Prospect Theory?

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