Determinants of Stock Market Investors’ Behavior in COVID-19: A Study on the Pakistan Stock Exchange

Abstract

As one of the most contagious diseases in history, Corona Virus (COVID-19) spread rapidly around the world infecting millions of people in the year 2020. Besides killing huge number of persons, the calamity not only ignited severe panic and chaos among them, it even affected vast businesses and stock markets around the globe. This study was undertaken to investigate those determinants, which affected the extent of stock market investors’ behavior in Pakistan during spread of COVID-19. Data was collected from various individual investors, representing a high response rate of about 86.5% from 167 respondents. From the analysis it was indicated that most important and significantly influencing determinants on investment decisions in Pakistan Stock Markets are pertinent to: ‘getting rich quickly, loss aversion, fear of losses, expected corporate earnings and dividends, gut feelings on the economy, previous performances of firm’s stock and opinions of its majority shareholders, and eventually, the recommendations of brokers and family/friends. Our findings would first, assist in understanding the most common behavioral patterns of investors and secondly, determine to show the adequate paths, which lead towards the growth of Pakistan Stock Market

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