Page 1 of 12
Journal for Studies in Management and Planning
Available at http://internationaljournalofresearch.org/index.php/JSMaP
e-ISSN: 2395-0463
Volume 01 Issue 09
October 2015
Available online: http://internationaljournalofresearch.org/ P a g e | 263
The Study on Influence of Psychological and Socio Cultural
Factor on the Share Market Operations. Reference to Batticaloa
District, Eastern Province, Sri Lanka.
S. Revathy
B.Com(EUSL), AAT, MBA (Reading) (EUSL) Department of anagement, Eastern University
(Revathy707@yahoo.com)
A.Andrew
BBA Hons (EUSL), MBA (USJP) Senior Lecturer Department of management, Eastern University
andrewsa1965@yahoo.com.au
Abstract
Stock market is an important part of the
economy of a country. The stock market
plays a pivotal role in the growth of the
industry and commerce of the country that
eventually affects the economy of the
country to a great extent. That is the
reason why, the government, industry and
even the central banks of the country keep
a close watch on the happenings of the
stock market. The stock market is
important from both the industry’s point of
view as well as the investor’s point of
view.
This study focuses the influence of
psychological and socio cultural factors to
implement on stock market in Batticaloa
District in the Eastern part of Sri Lanka.
This study was conducted with two
research objectives: to find out the degree
of psychological characteristics of
potential investors regarding the stock
exchange and to evaluate the level of
support of socio culture environment to
implement in share market.Self motivation,
perception and attitude is the dimension of
identifying the psychological
characteristics. Social culture factors are
including language skill, brokers support
and culture support to mature the socio
culture supportive.The study was
conducted among the potential investors
reside in the various part of the Batticaloa
District. The data were collected from the
100 sample of people. The proportionate
stratified random sampling method was
used to select the sampling units and the
structured questionnaire was used to
collect the data. The data were analyzed
using Univariate Analysis and Bivariate
analysis techniques. The unit of analysis
was individual person.
Finding of the study revealed that
respondents (potential investors) were
Page 2 of 12
Journal for Studies in Management and Planning
Available at http://internationaljournalofresearch.org/index.php/JSMaP
e-ISSN: 2395-0463
Volume 01 Issue 09
October 2015
Available online: http://internationaljournalofresearch.org/ P a g e | 264
moderate level supportive to implement the
stock exchange as indicated by the degree
(measured as mean value) of their
psychological characteristics (Self
motivation 3.5), perception (3.4), and
attitude (3.4). Socio cultural environment
(3.17) was moderate level influence. In
overall this study was find out moderate
level supportive to implement the stock
exchange in Batticaloa.
Keywords: Investment, Psychology,
Stock Exchange, Investor, and Socio
Culture Environment
1. INTRODUCTION
An island nation situated at the Southern
tip of India, Sri Lanka is often referred to
as the Pearl of the Indian Ocean. With the
end of a bitter three decade long civil
conflict, the country is taking advantage of
new found peace and stability and growing
economic prosperity to make its mark as a
global logistics center.
Increased political stability is laying the
way for strong growth on investment as
the Government formulates long term
robust development plans to drive
economy wide sustainable growth.
Our nation is developing nation and
agricultural one for hundred years due to
our capability of resources, gain
knowledge and technology requirements
even we greater than some nations. If we
want to become leading one we should
change our habits of investment.
Eastern province is a one of the nine
provinces in Sri Lanka. The Batticaloa is a
one of the district in Eastern Province. Our
society based on knowledge income and
saving has an essential role and making the
most valuable effects by using financial
system at an economic entity level.
The fundamental factors such as economy,
industry and company analysis play a key
role in investment decision process. In
earlier there are few ways to invest their
money for more money such as purchasing
land and gold, invest in education and
business ,life insurance, bank deposit share
market etc.. But now there are twenty
sectors for investment in stock exchange.
Each and every sector is important to
develop the nation.
The word Investment refers to the
deployment of surplus funds either in the
financial assets or in the physical assets
with the expectation of getting an optimum
return in future. R.Jayaraman,
Dr.G.Vasanthi, M.S.Ramaratnam,
(JBM&SSR Volume 3 ,2014).
These are under the stock exchange there
are twenty sector to invest the money
which is functioning under the capital
Page 3 of 12
Journal for Studies in Management and Planning
Available at http://internationaljournalofresearch.org/index.php/JSMaP
e-ISSN: 2395-0463
Volume 01 Issue 09
October 2015
Available online: http://internationaljournalofresearch.org/ P a g e | 265
market. First we understand the capital
market. The Financial Market, which is the
market for credit and capital, can be
divided into the Money Market and the
Capital Market. The Money Market is the
market for short-term interest- bearing
assets with maturities of less than one
year, such as Treasury bills, commercial
paper, and certificates of deposits. The
major task of the Money Market is to
facilitate the liquidity management in the
economy. The main issuers in the Money
Market are the Government, banks and
private companies, while the main
investors are banks, insurance companies
and pension and provident funds. The
Capital Market is the market for trading in
assets for maturities of greater than one
year, such as Treasury bonds, private debt
securities (bonds and debentures) and
equities (shares). The main purpose of the
Capital Market is to facilitate the raising of
long-term funds. The main issuers in the
Capital Market are the Government, banks
and private companies, while the main
investors are pension and provident funds
and insurance companies.
The Financial Market can be also be
classified according to instruments, such
as the debt market and the equity market.
The debt market is also known as the
Fixed Income Securities Market and its
segments are the Government Securities
Market (Treasury bills and bonds) and the
Private Debt Securities Market
(commercial paper, private bonds and
debentures). Another distinction can also
be drawn between primary and secondary
markets. The Primary Market is the market
for new issues of shares and debt
securities, while the Secondary Market is
the market in which existing securities are
traded.
(http://www.cse.lk/static/introduction
Investment, first of all we will learn here
that what Investment is? Is Investment just
a money or capital? Is Investment just a
part of your salary or Income? We will
answer all these questions in a single line
that Investment is that part of your money
whose nominal value increases along with
the inflation or time to increase its real
value. We will learn some benefits of
investing which you must know before
investing in stock market.
The part of money which you park in some
avenues like Bank Deposits, Real Estate,
Jewellery or Stock Market to get some
return on that capital in future is also
known as Investing or Investment.
There are many Instruments of Stock
Market called Securities like Shares,
Bonds, Debentures etc. and this stock
market have its own benefits in his own
