Socio-economic factors that affect the participation of the youth in the stock exchange market. A case study of Uganda Securities Exchange(USE)
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This study was to establish the socio-economic factors that affect the youth participation in the stock exchange market basing on the following objectives; to study the relationship between the financial literacy of the youth with their decision and ability to participate in the stock market. And to study the effect of the youth individual income and level of savings on ability to invest in the stock market The study used both primary and secondary data. A quantitative questionnaire was administered to 112 respondents and a response rate of 96% was attained. Simple random sampling was used whereby the researcher went to crested capital and administered 17 questionnaires and 95 respondents among university students. Secondary data was also obtained from existing literature from USE, CMA, crested capital reports, journals, newspapers, textbooks and other publications to support the collected primary data. Findings revealed that of the youth that had never invested, the majority 73% lacked information, 18% were not interested whereas 7 percent had other reasons. This implied that the majority of the youth never invested because they lacked information. Of the youth that had never invested; the majority 57% had a low monthly income whereas 4% had a moderate monthly income. Of those that had ever invested, the majority 4% had a low monthly income whereas no one had a moderate monthly income. The researcher concluded that the individual income and investment of the youth in stock are positively correlated but at a low rate hence as the income of the youth increases, they are also less likely to invest in the stock exchange market. The source of financial advice of the youth and investment of the youth in stock are highly positively correlated hence as the youth get financial advice from a better source, they are also more likely to invest in the stock exchange market. There was no significant statistical relationship between the status of participation in stock and the level of monthly income hence the researcher failed to reject the null hypothesis that there was no relationship between the level of income and savings of the youth and their ability to invest in the stock exchange market. However, there was a significant relationship between the status of participation in stock and the level of financial literacy tested at 5% level of significance. Hence 13 the researcher rejected the null hypothesis that there is no relationship between the financial literacy in the youth and their ability to invest in the stock market. The researcher recommended that there was need for the government to increase investor education in high schools and higher institutions of learning so as to increase awareness among the youth to enable them invest in the stock market. It was also recommended that the youth should be encouraged to get professional financial advisors so as to increase their financial literacy to increase their investment in the stock market.