HOW ARE TRADING ACTIVITIES OF RETAIL INVESTORS AFFECTED BY THEIR FINANCIAL ATTITUDE DURING THE COVID-19 PANDEMIC IN PAKISTAN? A MEDIATED MODERATED RELATIONSHIP OF RISK TOLERANCE AND FINANCIAL LITERACY

Abstract

The study's primary goal is to investigate retail investors' investment behaviours. Investing behaviour and its determinants is examine by addressing retail investors in Pakistan, one of the post-COVID-19 emerging countries. The relationship between financial attitude and behaviour is well-known in academic research, yet financial attitude and behaviour measurements continue to differ widely and are generally asked as a series of questions rather than statements. Individual investors actively trading on the PSX were considered as a population for current research. This study used a non probability (convenience sample) and a questionnaire survey technique to obtain data from respondents. The population for our study was individual retail investors trading in Pakistan stock exchange and sample size was 660. The SPSS data analysis method is used in this study. According to the study's findings, retail investors exhibit all components of the financial attitude identified by the research. Second, the data indicated that financial literacy, as a mediating variable, has a strong relationship between retail investors' financial attitudes and trading actions. In answer to the third research goal, the research reveals that risk tolerance has a strong moderating effect on the relationship between retail investors' financial attitude and trading activity. In addition, the regression findings suggested a mediated moderation between retail investors' financial attitudes and trading activities. For academics and politicians in developing countries, the findings of this study are important. Academics may come up with new behavioural models to show how to deal with a situation like COVID-19 that is difficult to predict. Keywords: COVID-19, Trading activity, financial attitude, Pakistan stock exchange, Retail Investor