Factors affecting the brokers’ recommendations

It is well known and recognized fact that savings and investments are vital factor for the growth and development of an economy. In this context, capital market plays an important and crucial role by mobilizing the savings in an economy and making it available from potential investors to users. Stock market is one of the important components of the capital market represent a sphere where the individuals, institutions, units etc. come to meet their own objective of saving and investment. It is a place where only registered members known as “Stock Brokers” can deal for himself or on behalf of clients. As it is well accepted fact that stock market plays an important role in the Indian financial system at the same time availability of reliable information is a key to efficient functioning of the stock market. Here the work of stock brokers begins because they probe the entities deeply and provide information which helps the investors and traders to frame their decision. They are not only providing the information but also make recommendations to the clients and there are number of factors which affect their recommendations. The present study has been done with the objectives of exploring all those factors and to determine which factors highly affect, moderately affect and least affect brokers’ recommendations. For this a sample of 120 brokers has been selected from the Jalandhar district. The techniques of percentage, weighted average and factor analysis have been used to draw meaningful inference from the study and the results has shown that there are 3 key factors by clubbing the related variables namely, conditions prevailing all over whether in company, country or outside the country; brokers’ outreach, analysts and research ability; and availability of information with the brokers play a major role while stock brokers makes recommendations.