POST COVID-19 INFLUENCE OF HERDING EFFECT BIAS ON INVESTMENT DECISIONS OF KSE MEEZAN INDEX (KMI–30)

Abstract

In this study researcher analysed post Covid-19 influence of Herding effect bias on investment
decisions of Pakistani stock investors specifically KSE Meezan index (KMI-30). KMI-30 index is a
stock market index on the Pakistan Stock Exchange in Pakistan of thirty companies that have been
screened for Islamic Shariah criteria. This index was introduced in 2009 and the base period for this
Islamic index is 30 June 2008. Post Covid-19 Financial markets all over the World markets have
changed and it affected investor decision making in number of ways. Conventional investments like
keeping money in Banks, buying Fix term deposit, buying Prize bonds or gold bars is now outdated in
current scenario. Investor now invest more wisely than before Covid-19 they prefer to encash those
stock markets which sinked during Covid-19 pandemic and try to capitalize the opportunity of higher
returns now when these markets are gaining momentum again. Pakistani stock market investors
specifically KMI-30 index is one of those gaining momentum market where now not only local but
foreign investors are investing and buying shares due to Herding effect bias and it has raised the KSE
Meezan index (KMI-30) from 71167 to 68335 (June-December,2021). Researcher made an attempt to
address post Covid-19 influence of herding effect bias on investment decision of Pakistani stock
investors by taking herding effect bias along with its sub variables as an independent variable and
investment decision of these investors as dependent variable and evaluated the impact of both
variables in post Covid-19 Pakistan stock market performance. Researcher used systematic sampling
technique employed it to Pakistani stock investors specifically KSE Meezan index (KMI-30). The
study is quantitative in nature so questionnaire survey technique was employed for data collection
KSE Meezan index (KMI-30). Over/Under react theory of behaviour finance is backing this study and
has served the base for researcher. Researcher used descriptive statistics, rank correlation and its
analysis, association method and applied logistic regression model. Findings of this study suggest that
Post Covid-19 pandemic influence of Herding effect bias have positive impact on individual investors
decisions at KSE Meezan index (KMI-30).