Author
Fabian MPUKU* and Mubanga MPUNDU**
Abstract
This study examines the factors affecting the promotion of portfolio investment among individual
investors in Zambia using the Lusaka Stock Exchange as a point of reference. The
study derives its cause with the observational view that little investments are occurring in the
stock market, which has eventually affected the promotion of portfolio investments in Zambia
and, thereby, did a disservice to the main purpose for which Lusaka Securities Exchange was
established. The study observed that individual investors have instead channeled their investments
towards other portfolios such as Treasury Bills, Government Bonds, Real Estate, Agriculture
and Village Banking, some of which are higher risk than the stock market. The study
identified variables through the theoretical framework developed using investment theories
to help establish what influences investment choices among individual investors. The variables
used were individual characteristics, listed companies’ characteristics and public awareness.
The purpose is to assist policymakers in devising policies that directly target these variables,
intending to encourage individual investors to invest in the stock market. The data collection
was done through primary and secondary techniques from community households and the
Lusaka Securities Exchange, Bank of Zambia (BOZ), the Ministry of Finance (MOF) and the
Securities Exchange Commission (SEC). The study revealed that awareness related to the
functioning of the Stock Market has a positive and significant influence on the investment
decisions of individual investors. The results further suggest that households who are aware
of the stock market are more likely to invest in stocks than those who are unaware of the stock
market. An education programme for investors’ particularly educational tours and short courses
offered on a continual basis is very crucial in helping to educate the public about securities.
Media can also be used to reach out to more people, particularly in explaining the significance
of investing in the stock market.
