Assessing the factors that affect the behavior of individual investors on the vietnamese stock market

BANKING ACADEMY FOREIGN LANGUAGE FACULTY -  - GRADUATION THESIS Assessing the factors that affect the behavior of individual investors on the Vietnamese stock market Supervisor : Associate Prof Dr Tran Thi Xuan Anh Student name : Nguyen Thi Huyen Class : K20 ATCC Faculty : Foreign Language Student ID : 20A7510078 Hanoi, May, 2021 Tai ngay!!! Ban co the xoa dong chu nay!!! 17014125851521000000 CERTIFICATE OF ORIGINALITY I declare that this thesis is my work, with the consultation of Associate Professor Ph.D.Tran Thi Xuan Anh The results and figures are honest and accurate, not copy any other thesis The entire content of this thesis is presented on my own and compiled from legally cited sources If I find out that copying other research results is found, I take full the responsibility Students perform Nguyen Thi Huyen i ACKNOWLEDGEMENTS I would like to express my deep gratitude to Banking Academy for creating good conditions in terms of facilities and quality of training for me to study I would like to express my deep and sincere gratitude to my Tran Thi Xuan Anh lecturer who has directly guided for me to complete this thesis She has provided invaluable guidance throughout this thesis It was a great privilege and honor to work and study under her guidance I would like to say thanks to teachers of the faculty of foreign language - Banking Academy In addition, I am extremely grateful to my parents for their love, caring and sacrifices for educating and preparing me for my future I am extending my thanks to friends for their help and support during my study at banking academy Thank you sincerely! ii TABLE OF CONTENTS Abstract Chapter 1: Introduction 1.1 Introduction 1.2 Background of the study 1.3 Objectives of study 1.4 Significance of study 1.5 Scope and limitation of the study 1.6 Definitions of terms Chapter 2: Review of related literature 2.1 Literature review 2.1.1 The Behavioral Finance Theory -Introduction of the theory -The basic contents of behavioral finance theory -Review of previous studies about behavioral finance theory 2.1.2 Two methods by which the investment decision is influenced -The fundamental analysis -The technical analysis 2.2 Theoretical and Conceptual framework Chapter Methodology 12 3.1 Locate of the study 12 3.2.Research Design 12 3.3 Data gathering procedure 13 3.4 Population and Sample description 13 3.5 Research instrument 13 iii 3.6 Research ethics 14 3.7 Reliability and validity 14 CHAPTER 4: FINDINGS AND DISCUSSION 4.1 Data description 4.1.1 Classification of investors by gender 16 4.1.2 Classification of investors by age 16 4.1.3 Classification of investors by the annual income 17 4.1.4 Classification of investors by the academic level 18 4.1.5.Classification of investors by the risk preference 18 4.2 Factors impacting investors in the Vietnam stock market 4.2.1 The level of impact of the “Reputation of the issuing company” factor on individual investors' behavior 19 4.2.1.1 The degree of impact of the "Reputation of the issuing company" factor on individual investors' behavior in terms of gender 20 4.2.1.2 The degree of impact of the "Reputation of the issuing company" factor on individual investors' behavior in terms of age 20 4.2.1.3 The degree of impact of the "Reputation of the issuing company" factor on individual investors' behavior in terms of annual income 20 4.2.1.4 The degree of impact of the "Reputation of the issuing company" factor on individual investors' behavior in terms of educational level 21 4.2.1.5 The degree of impact of the "Reputation of the issuing company" factor on individual investors' behavior in terms of risk preference 22 4.2.2 The degree of impact of the "Fundamental analysis" method on the behavior of individual investors 22 iv 4.2.2.1 The level of impact of the “Fundamental analysis” method on individual investors' behavior in terms of gender criteria 23 4.2.2.2 The level of impact of the “Fundamental analysis” method on individual investors' behavior in terms of age 24 4.2.2.3 The level of impact of the “Fundamental analysis” method on individual investors' behavior in terms of the annual income 24 4.2.2.4 The level of impact of the “Fundamental analysis” method on individual investors' behavior in terms of the educational level 25 4.2.2.5 The level of impact of the “Fundamental analysis” method on individual investors' behavior in terms of the risk preference 25 4.2.3 The degree of impact of the "Technical analysis" method on individual investors' behavior 26 4.2.3.1 The level of impact of the “Technical analysis” method on individual investors' behavior in terms of gender 27 4.2.3.2 The level of impact of the “Technical analysis” method on individual investors' behavior in terms of age 27 4.2.3.3 The level of impact of the “Technical analysis” method on individual investors' behavior in terms of the annual income 28 4.2.3.4 The level of impact of the “Technical analysis” method on individual investors' behavior in terms of the educational level 29 4.2.3.5 The level of impact of the “Technical analysis” method on individual investors' behavior in terms of the risk preference 29 4.2.4 The degree of impact of the " Recommendation of counselors" factor on individual investors' decision… 30 4.2.4.1 The level of impact of the “Recommendation of counselors” factor on individual investors' behavior in terms of gender criteria 31 v 4.2.4.2 The level of impact of the “Recommendation of counselors” factor on individual investors' behavior in terms of age 31 4.2.4.3 The level of impact of the “Recommendation of counselors” factor on individual investors' behavior in terms of the annual income 32 4.2.4.4 The level of impact of the “Recommendation of counselors” factor on individual investors' behavior in terms of the educational level 32 4.2.4.5 The level of impact of the “Recommendation of counselors” factor on individual investors’ behavior in terms of the risk preference 33 4.2.5 The degree of impact of the "Herd behavior" factor on individual investors' behavior: 4.2.5.1 The level of impact of the “Herd behavior” factor on individual investors' behavior in terms of gender 35 4.2.5.2 The level of impact of the “Herd behavior” factor on individual investors' behavior in terms of age 35 4.2.5.3 The level of impact of the “Herd behavior” factor on individual investors' behavior in terms of the annual income 36 4.2.5.4 The level of impact of the “Herd behavior” factor on individual investors' behavior in terms of the educational level 37 4.2.5.5 The level of impact of the “Herd behavior” factor on individual investors' behavior in terms of the risk preference 37 4.2.6 The degree of impact of the " Overconfidence" factor on individual investors’ behavior 38 4.2.6.1 The level of impact of the “Overconfidence” factor on individual investors' behavior in terms of gender 39 4.2.6.2 The level of impact of the “Overconfidence” factor on individual investors' behavior in terms of age 40 vi 4.2.6.3 The level of impact of the “Overconfidence” factor on individual investors' behavior in terms of the annual income 40 4.2.6.4 The level of impact of the “Overconfidence” factor on individual investors' behavior in terms of the educational level 41 4.2.6.5 The level of impact of the “Overconfidence” factor on individual investors' behavior in terms of the risk preference 42 4.3 Assessing factors affecting investor behavior on the Vietnamese stock market in the current time 4.3.1 The reputation of the issuing company factor 42 -Advantages - Disadvantages 4.3.2 The "Fundamental analysis" method 43 -Advantages - Disadvantages 4.3.3 The “ Technical analysis” method 44 -Advantages - Disadvantages 4.3.4 The “Recommendation of counselors” factor 44 -Advantages - Disadvantages 4.3.5 The “Herd behavior” factor 44 -Advantages - Disadvantages 4.3.6 The “Overconfidence” factor 45 vii -Advantages - Disadvantages CHAPTER 5: CONCLUSION AND RECOMMENDATION 5.1 Summary of the findings 46 5.2 Recommendations 47 a Individual investors on the Vietnam stock market b Stock companies c Companies listed on the stock market d State management agencies 5.3 Final thoughts 51 viii LIST OF TABLES Table 4.2.1.1: The level of impact of the "Reputation of the issuer" factor by gender Table 4.2.1.2: The level of impact of the "Reputation of the issuer" factor by age Table 4.2.1.3: The level of impact of the "Reputation of the issuer" factor by the annual income Table 4.2.1.4: The level of impact of the "Reputation of the issuer" factor by the educational level Table 4.2.1.5: The level of impact of the "Reputation of the issuer" factor by the risk preference Table 4.2.2.1: The level of impact of the "Fundamental analysis” method by gender Table 4.2.2.2: The level of impact of the "Fundamental analysis” method by age Table 4.2.2.3: The level of impact of the "Fundamental analysis” by the annual income Table 4.2.2.4: The level of impact of the "Fundamental analysis” method by the educational level Table 4.2.2.5: The level of impact of the "Fundamental analysis” method by the risk reference Table 4.2.3.1: The level of impact of the "Technical analysis” method by gender Table 4.2.3.2: The level of impact of the "Technical analysis” method by age Table 4.2.3.3: The level of impact of the "Technical analysis” method by the annual income Table 4.2.3.4: The level of impact of the "Technical analysis” method by the educational level Table 4.2.3.5: The level of impact of the "Technical analysis” method by the risk preference ix