Abstract:
Objective – This paper examines the risk behaviour of individual investors in the Dar
es Salaam Stock Exchange (DSE), Tanzania. Furthermore, it aims to analyse how risk
behaviour variables influence individuals' trading frequency of shares at the DSE.
Design/methodology –The study uses cross-section data from a structured
questionnaire distributed to 200 individual investors selected with a snowball
sampling procedure. It further used descriptive statistics and multinomial logistic
regression (MLR) to analyse the risk behaviour of individual investors and their
impact on share trading frequency.
Results – The study reveals that share prices, investment experience, and amount of
funds invested depict the risk aversion behaviour of individual investors and thus
influence their share trading frequency at DSE. However, individuals’ risk perception
did not significantly influence share trading frequency.
Research limitations/implications –The study used individual investors to
assess risk behaviour in trading frequency. However, individuals have limited risk
awareness and analysis knowledge and use brokers and financial analysts.
Novelty/Originality –Individual investors' risk behaviour in relation to share
trading at DSE received attention for the first time in this paper. The study proposes
to DSE improve policies and training programs relating to individuals trading and risk
management to stimulate active share trading among individual participants in
exchange for improved liquidity and contribution to economic growth.
