An Investigation on Effect of Share Price Change on Investment Decision in Rwanda Stock Exchange

Abstract

This study focused on investigating the effect of share price change on investment decision in Rwanda Stock Exchange. An evaluation was needed to find out whether the share price change is effective and whether it has really an impact on investment decision in RSE. The main aim of this study was to analyse the effect of share price change on investment decision in Rwanda Stock Exchange. Relevant methods (descriptive statistics, correlation, and regression analyses) were used to gather necessary data from various sources, either primary or secondary sources from a sample size of 394 respondents selected according to the formula of Morgan. This sample was chosen because it was easier to manage, and it was enough to generate findings as well as to generalize the findings to a bigger population. An explanatory descriptive design was used, data were collected by face-to-face questionnaire, and then the collected data were analysed and interpreted through SPSS (Statistical Package for the Social Sciences).The aim of this research was to see whether share price change has a greater influence on investment decision in the Rwanda Stock Exchange. Based on the results of empirical analysis about the cause-effect between the share price change and investment decision, the findings revealed that there was evidence that the chosen determinants that are: company news, demand and supply forces, innovation, inflation, and firm`s financial performance, have significant effect on share price and consequently affect investment decision. Thus, the study concluded by showing to what extent the share price change is affecting the investment decision in Rwanda Stock Exchange.

Keywords: Company news, Demand and supply forces, Innovation, Inflation, Financial services, and Investment decision.

DOI: 10.7176/RJFA/12-22-02

Publication date: November 30th 2021