FACTORS EFFECTING MARKET ACTIVITIES THAT LEADS TO INVESTOR'S OVERCONFIDENCE: PAKISTAN STOCK EXCHANGE CASE

Qureshi F. J., ERTUĞRUL M.

36th International Scientific Conference on Economic and Social Development (ESD) - Building Resilient Society, Zagreb, Croatia, 14 - 15 December 2018, pp.264-272 identifier

  • Publication Type: Conference Paper / Full Text
  • City: Zagreb
  • Country: Croatia
  • Page Numbers: pp.264-272
  • Keywords: Behavioural finance, weather effect, investors' overconfidence, market turnover, stock markets, WEATHER, RETURNS, MOOD
  • Anadolu University Affiliated: Yes

Abstract

The purpose of the research is to review the results of study conducted in 2008 that claim to investigate the relationship of investors' happy sentiment and overconfidence effect. Cloud coverage, temperature and temperature change, former returns, and short term loan 1 change rate are used as proxies for happy sentiment. Data from Pakistan stock exchange and Metrological department is collected to check the Relation. The happy sentiment index is divided into two categories: "natural environment happiness" and "investment atmosphere happiness." The results suggest that short term loan rates, Previous day turnover and previous day activities have significant low effect on investment overconfidence of investor so trading activities are affected. Natural environment factors have less impact while investment atmosphere happiness has moderately high effect on market activities of investors.