Stocks and Shares under Scrutiny

Just over four fifths of the share-owning population believe investing in the stock market represents a good long-term investment. This is the headline finding from the recently released 2001 British Share Ownership Survey, conducted for the London Stock Exchange and ProShare by MORI and the World Investor Link.


The other major findings also include an encouraging "bought-to-sold" ratio of shares. Although for the majority of the 1990s, private investors were selling shares more than they bought, this ratio was reversed during 2000 and investors have continued their increased buying into 2001.

Looked at specifically, the research indicates that only 26% of all GB shareholders have sold any shares in the past 12 months. The majority of respondents have continued to hold most of their shares until they need the money (34%) or the shares themselves reach a suitable price for selling (24%).

According to Chris Broad, head of Broker Services at the London Stock Exchange,
"The MORI research indicates that the vast majority of private investors in the UK are sitting tight to ride out the current market conditions. They are understandably more cautious at the current time, but it is encouraging that their overall confidence in the stock market as a long-term investment is not diminished. The Exchange is committed to helping private investors by providing a range of services free of charge via the internet allowing them to become wiser investors, to monitor their investments and to do company research."

This latest research also reveals that private investors are taking a keener interest across a broad range of company communication. Commenting on this aspect of share ownership, Diane Hay, chief executive of ProShare, suggests "When market conditions are good, private investors take a more passive approach to their investments, entrusting the company management to look after them. Current conditions, however, are prompting private investors to take a much greater interest in companies so they will be more likely to attend AGMs and to vote on company resolutions."

The findings also indicate that investors are becoming more comfortable receiving communication from companies over the Internet. The survey revealed that 86% of those who have ever sought company information via a company's website claimed to have found it useful. Grant Woodall, director of World Investor Link, remarked that, "As interest in communications increases, the use of the Internet will help to enhance this process. This is good news for both the investor and company. New technology creates the opportunity to bring the two closer together."

MORI undertook this research across a national sample during the period 16th August to the 9th September 2001.

All articles 2006-22 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.

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