private investors net equity buyers over the summer

Despite the market volatility over the summer, private investors were still net buyers of equities.

private investors net equity buyers over the summer


According to research from Capita Registrars, this represents the fifth consecutive period where private investors were net equity buyers, with £3.5bn added since mid-May 2010, the longest sustained period of net buying since the research started six years ago.

The most recent three-month timeframe is also the largest net purchasing period since spring 2009 and the first June-to-August to be in positive territory since 2006.

Overall, retail shareholdings dropped to £217bn at the end of August, a fall of £320bn by the end of May, thanks to the equity market’s rapid peaks and troughs. For example, on 22 September, private shareholdings fell to £203.1bn as in a single day the market closed 4.7% down – or £10bn down in individual investor’s language.

According to Charles Cryer, chief executive at Capita Registrars, private investors are “exceptionally brave” to be buying now.

“They’re obviously on the lookout for a bargain, although the economic outlook is uncertain and risks to markets abound,” he said.

“Most importantly, though, they are looking everywhere to find an inflation-proof income,” he added. “Despite the turmoil, dividends have been growing strongly this year, and the market is now yielding 3.8%, twice as much as government bonds, yet also with the potential prospect of income growth as companies are cash-rich and have begun to return that cash to shareholders. The longevity of the buying spree reflects that ever more desperate search for yield.” 



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