Monday, September 27, 2010

Highlighted By BB: UK Private Investors Are Back!

On the UK Telegraph:

  • Private investors pile back into stock market
    Investors traded £1.8bn of stock in the last six months as private shareholdings hit a two-year high.

    The six months to the end of August was the busiest trading period since 2007, according to Capita Registrars.

    The net buying over the summer coupled with the good performance of the market saw private investor shareholdings rise in value. At the end of August, they reached £163bn, up from £158bn at the end of May, and from a crisis low of just £108bn in December 2008.
    By the middle of September, market movements had taken their holdings even higher, rising to £173bn, the highest in two years. Not only that, but the proportion of the market in private investor hands also rose for the first time in two years, reaching 9.5pc, up from an all-time low of just 9.3pc in May 2010.

    Justin Cooper, chief operating officer at the firm, said: "Private investors bought heavily when the stock market bottomed out in spring 2009, anticipating the nadir of the recession. This year they did so again when the market dipped sharply in July, perhaps anticipating the brighter economic news that subsequently emerged about the strength of the recovery.

    "This followed profit taking in the spring when the stock market peaked. Once again, we have seen retail investors timing equity purchases astutely, buying on weakness and selling into strength."

    Capita Registrars said that between June and August, private investors bought £852m of defensive shares and sold £335m of cyclical shares. The most favoured sector was utilities, while resources stocks (including mining and oil shares) and financials were sold down. Industrials (which includes construction and manufacturing) and consumer