Social Media and the Stock Market – How IBA alumni are helping investors be smarter
Sennen Dsouza- BBA 2013
About Investors Lounge:
Investors Lounge, an alumni initiative, is Pakistan's leading equity markets intelligence gathering platform. The platform aggregates money flows from key participants in the stock market, transactions of corporate insiders, analyst recommendations, news and announcements and alternate data to help institutional and retail investors break free from the tip-centered approach to investing.
In May 2017, Pakistan, one of Asia's best performing stock markets at that time, was termed to have a serious social media issue: a persistent, endemic issue of fake news & misinformation being circulated via Facebook and Watsapp to manipulate retail investors into entering or exiting stocks prematurely. This took an unbelievable toll on the savings and confidence of the average stock market investor. Industry experts pointed at a lack of awareness and investor education.
The retail investor segment in Pakistan's stock market is driven by 'Tips'. At best most 'tips' are rumors relayed without much malice. But more often than not, these tips are crafted to spread panic so that investors exit an otherwise profitable bet. This creates space for more influential players at the expense of smaller investors. Conversely, if influential players decide to exit from a distressed stock, positive news may be 'manufactured' so that retail investors can be lured and the stock can be dumped onto them.
Investors Lounge, Pakistan's leading Equity Markets intelligence firm, is run by two IBA Alumni. The company, along with providing a cutting-edge stock market intelligence platform to institutional investors, has launched a first-of-its-kind 'Investor Education Program' that they run through Facebook. Using Social Media to get the message across to dispersed sets of investors across Pakistan, the company is building video content specifically in Urdu to create a heightened level of awareness in investors. Their goal is to teach investors how to utilize financial analytics and alternate data to understand market participant behavior, identify suspicious trends and fake news. They believe that it i time that investors in Pakistan adopt a data-driven approach towards investing.
