Awareness, trust and stock market efficiency: the case of Uganda Securities Market

Abstract

The study was motivated by the challenges of awareness and trust on the Uganda Securities Exchange. It sought to examine the extent to which stock market efficiency depends on the awareness and trust of investors. The study was guided by three major objectives; to examine the relationship between awareness and trust; to establish the relationship and impact of awareness and trust on stock market efficiency. The study adopted a cross sectional survey design which was correlational in nature. It used both primary and secondary data sources and later analyzed using the statistical package for social sciences to generate descriptive and inferential statistics.

The findings revealed a strong positive correlation between awareness and trust among the investing public. The study also revealed a strong positive correlation between trust and stock market efficiency. Both awareness and trust had an impact on stock market efficiency but from the simultaneous multiple regression model the findings revealed that trust was a more important predictor of stock exchange performance..

The study recommends the stepping of awareness campaigns and restructuring of the curricular to have stock market studies at A-level and to make incomes on stock trading tax free. Others are the government should make it policy to divest through the stock exchange instead of looking for a strategic partner. The locals should be targeted first before any foreign investors are brought on board when it comes to selling local company shares. USE should also encourage more cross boarder listing.