Purpose: This study investigates the key factors influencing the stock buying
behavior of traders in the Dhaka Stock Exchange (DSE), Bangladesh.
Methodology: Primary data were collected from 139 DSE traders using
convenience and snowball sampling techniques. The analysis employed
descriptive statistics, t-tests, ANOVA, correlation, and factor analysis to explore
the determinants of stock purchase decisions.
Findings: Traders give the highest priority to political stability, company
reputation, financial indicators such as PE/EPS ratios, annual reports, regulatory
policies, expected dividends, and their own confidence and risk-taking tendencies.
Moderately important factors include share price movement, affordability, market
efficiency, investment satisfaction, hedging decisions, institutional shareholdings,
and policymakers’ reviews. Elements such as the investment environment,
transaction facilities, media coverage, ethical practices, bank interest rates, and
online information from companies or the stock market are considered less
influential. Other investment opportunities, company business activities, trust in
advisors or brokers, tax rates, and CSR initiatives hold only marginal importance.
Rumors, investor mood, third-party information, public holidays, fiduciary advice,
and religious aversion exert minimal or no influence on traders’ decisions.
Practical Implications: The findings offer valuable insights for understanding
behavioral influences in a market characterized by frequent fluctuations,
instability, and high emotional involvement, thereby contributing to the broader
field of behavioral finance in emerging markets.
Value/Originality: The study evaluates stock purchase decisions using 46
attributes on a 5-point Likert scale, identified through face validity to ensure
relevance. Strong reliability is confirmed with a Cronbach’s alpha of 0.876,
demonstrating consistency of the measurement instrument.
Limitations: The study is limited to the Dhaka Stock Exchange, the largest stock
market in Bangladesh, comprising approximately 3.3 million traders.
