Assessment Of Individual Investors Preference To Invest On The Shares Of Ethiopian Insurance Share Companies After Ipo

A number of studies have been undertaken to identify the factors influencing individual investor’s decisionrnpreference to invest in stock markets by considering specific factors of both financial and non-financial likernsocial factor, cultural factors, psychological perception and others. This study aimed to investigate therndeterminant factors that influence individual investors’ preference to invest on the shares of Ethiopianrnprivate insurance share companies. In Ethiopia t he number of private insurance companies isrnincreasing from 8, in 2005, to 16 in 2015 which holds around 72 % of the market share of therninsurance industry. The study deployed both primary and secondary data, the purpose of thernsecondary data is to supplement findings of the primary data. The primary data is about financial,rnsocial, cultural and psychological perception of individual shareholders which was obtained andrnanalyzed through questionnaire from insurance companies shareholders and the secondaryrnfinancial panel data covers the period from 2003 to 2014 pertaining to eight (8) Ethiopian insurancernshare companies about the profitability, leverage, firm size, general inflation of Ethiopia and onernyear lagged value of earning per share as possible determinant factors of individual investors’rnpreference which is proxied by earning per share. The empirical results of both the primary datarnand the regression output of the secondary data revealed that financial, social, cultural andrnpsychological factors have an impact on the investment decision preference of the individualrninvestors. Accordingly investors recommended to look at insurance companies choices relative torncomparable companies based on multiple factors of both financial and non-financial factors relatedrnto social, cultural, psychological, profitability, firm size with regard to total asset and otherrnhistorical financial performances. In addition insurance companies should enlighten investors onrnthe factors that are necessary to maximize their wealth in the capital market that will affectrninvestors’ investment decision.rnKey words: Insurance shareholders, investors’ preference, non- financial factors

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