The Impact of Investors’ Sentiment on the Equity Market: Evidence from Ghanaian Stock Market

Abstract

Investor’s Sentiment plays a major role in choosing which stocks we invest. Investors’ sentiment can be defined as investors’ attitude and opinion towards investing in the Stocks. The aim of this research is to analyse the individual investor’s sentiment and also to analyse the influence of Market Specific Factors on investors’ sentiment. The investor’s attitude towards investing is influenced by rumours, intuition, herd behaviour among investors and media coverage of the stock. 100 investors in Ghana were chosen for the study. These investors were administered a Structured Schedule, containing pre-validated scales to measure the investor sentiment. Once the constructs were found to be both reliable and valid, the impact of Herd Behaviour, Internet Led Access to Information and Trading, Macro Economic Factors, Risk and Cost Factors, Performance Factors and Confidence Level of Institutional Investors, Best Game in Town Factors were tested by using the Bootstrapping method. Few Market Specific Factors had a significant impact on the investors’ sentiment in Ghana.