Loss of Confidence of small investors

Loss of Confidence of small investors

• 1.
  LOSS OF CONFIDENCEOF SMALL INVESTORS Done by: ROHINI.A 20BCC043
• 2.
  INVESTOR CONFIDENCE AFFECTSTOCK PRICES TO RISE OR FALL: Bull market – Stock prices are rising and investor confidence is growing. Its often tied to economic recovery or an economic boom as well as investor optimism. Bear market – Stock prices are falling and investor confidence is fading. It happens when an economy is in recession and unemployment is high with rising prices. FACTORS INFLUENCE INVESTOR CONFIDENCE INCLUDE: o Company news and performance o Industry performance o Economic factors ( interest rates, inflation, economic outlook, change in economic policy)
• 3.
  SEBI (Securities andExchange Board of India) is the regulatory body that oversees and regulates the securities market in India. Loss of confidence of small investors in SEBI can occur for a variety of reason such as o Regulatory failure Small investors may lose confidence in SEBI if they feel that the regulatory body is not doing enough to protect their interests. For example: Financial scam or fraud that affects small investors, they may feel that SEBI did not do enough to prevent it. o Lack of awareness Small investors may also lose confidence in SEBI if they feel that they are not adequately informed about the regulatory framework and how it works. This can lead to a lack of trust in SEBI’s ability to regulate the securities market.
• 4.
  o Inefficiency Small investorsmay lose confidence in SEBI if they feel that the regulatory body is inefficient or ineffective in carrying out its duties. For example: If there are delays in processing investor complaints or if SEBI is slow to take action against fraudulent companies, small investors may lose faith on the regulatory body. o Insider trading Small investors may also lose confidence in SEBI if they feel that insider trading is rampant and not being adequately regulated. This can lead to a sense of unfairness and a lack of trust in the regulatory system.
• 5.
  In order toregain the confidence of small investors, SEBI needs to take measures to address these concerns. o Increasing transparency o Improving communication with small investors o Taking strict action against fraudulent companies and insider trading If small investors lose confidence in SEBI, it can have several negative consequences such as: o Reduced participation o Reduced investment o Increased volatility
• 6.
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