International Journal of Commerce and Management Research

Authors
K Sambasiva Rao, Yonas Sendaba Nemera

Abstract
The main objective of this study is to identify factors influencing the investors’ perception on investing in shares. The study of investors’ sentiment has become the prominent area of behavioural finance researches as the theory of efficient market hypothesis, which state investors react & perform in the market rationally, while empirical evidence in behavioural finance literature shows that individual investors do not behave rationally. Our research is descriptive in its nature it only tries to explain what is there only. We have collected our data using structured questioner. After coded the data has been analysed using SPSS version 20. We used descriptive statistics such as frequency and percentages, and one sample t-test. We have found that there is only primary share market is operating in Ethiopia and companies are selling their share in primary market since there is no established stock exchange. The t-test result has reviled that there is a positive overall investors’ perception about investing in shares. Industry in which the company is operating, whether company is new or old, easily transferability of shares, par value of shares, and the goodwill of the company are factors affecting influencing investors to invest in shares. Earning dividend is one of the motivating factors for investors to purchase shares. Positive investor’s sentiment is vital for the development of share market in Ethiopia.