Assessment of Perceptions of Shareholders towards the Benefits of Investing in Shares: The Case of Awash International Bank S.C.
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Date
2009-06
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Addis Ababa University
Abstract
The main focus of this paper is assessing the perception of shareholders towards
the benefits of investing in shares. A questionnaire was answered by 86 respondents in
Awash International Bank S.C. The sample of this study is relatively heterogeneous,
which allows the researcher to have an overview of the perceptions and behavioral
tendencies of a variety of shareholder groups in setting objectives, risk-taking, and in
understanding the benefits of investing in shares. The majority of shareholders have
long-term objectives and in general high risk taking tendencies were observed. In risk-
taking, there is a significant difference between gender and among age categories.
The findings suggest that the shareholders have inadequate knowledge of the
benefits to be realized in relation to investing in shares. The problem spreads across a
broad spectrum of shareholders of various categories, both genders, and different
academic disciplines. Consistent with previous studies, the results have shown that
female shareholders are less knowledgeable about the benefits than male shareholders;
non-business majors are less knowledgeable than business majors, and institutional
shareholders have better understanding than either individual or joint shareholders. The
differences between these groups are statistically significant. The secondary data
analysis also supports the hypotheses constructed. On the other hand, the corporate
governance practices of the bank in protecting the rights of shareholders are collectively
encouraging. Generally, the findings suggest that low awareness levels of the benefits of
investing in shares exist among shareholders and the issue needs to be addressed
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Keywords
Investing in shares:, Awash international bank S.C