African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4193

Full Length Research Paper

An empirical evidence of factors in equity selection process in Malaysia

Tun-Pin Chong1* and Ming-Ming Lai2
1Faculty of Business and Finance, Universiti Tunku Abdul Rahman, Jalan Universiti, Bandar Barat, 31900 Kampar, Perak, Malaysia. 2Faculty of Management, Multimedia University, Jalan Multimedia, 63100 Cyberjaya, Selangor Darul Ehsan, Malaysia.
Email: [email protected]

  •  Accepted: 19 April 2011
  •  Published: 04 August 2011


This paper examined the factors influencing equity selection process and its association with expected and actual return. This study incorporated neutral information, accounting information, social relevance and advocates’ recommendations. A total of 199 usable questionnaires were collected by using snowball and convenience sampling. Descriptive study, factor analysis, correlation analysis and multiple regression were applied. The results showed that neutral information appeared to the most important factor for Malaysian investors, followed by accounting information, social relevance and advocates’ recommendations in equity selection process. Neutral information was positively correlated while accounting information was negatively correlated with expected return. Social relevance factor was found significant for female investors in their investment decision compared to male investors. As for stock market experience perspective, investors with 5 to 10 and 15 to 20 years’ experience highly utilized accounting information in assisting their investment decision and investors with more than 20 years of experience were least likely to use accounting information. The study concluded that investment decisions of investors could be affected with diverse variables and they did not rely on a single integrated factor.


Key words: Equity selection process, information, social relevance, investor behavior, and advocates recommendations.