Private investors wary of markets in first months of 2003

15 May 2003

Private investors remained wary of re-entering the markets during the first quarter of 2003, according to the ComPeer survey published today.

Concern about the international situation and a lack of activity in the markets led many private investors to forego their usual end-of-tax-year trading, according to the quarterly survey of private investor activity. The absence of significant capital gains for many investors (due to falling markets) meant that the end of the tax year had little if any impact on trading volumes. However, many firms reported an increase in investment activity in March which continued into April, although this came too late to improve the overall first quarter figures.

Key figures of the ComPeer quarterly survey of private client activity include:

• private client trading volumes fell by 13.1 per cent during Q1 2003 - the lowest trading levels since Q4 1996;
• 80 per cent of investors with paper shares did not trade during the quarter, nor did 84 per cent of those holding shares electronically; and
• online trading volumes remained stable at around 500,000 trades per quarter.

APCIMS Chief Executive Angela Knight said:

“Not surprisingly this was a difficult quarter for private client firms, but there is some encouraging evidence that investors are taking an interest in the market again. However we remain concerned at the continuing cost of regulatory change. In a separate survey of our members’ views over the same period, 90 per cent cited ‘keeping on top of regulatory change’ as an issue which particularly affected their business”

Notes to editors

1. APCIMS, the Association of Private Client Investment Managers and Stockbrokers, represents the overwhelming majority of private client stockbrokers and investment managers in the UK, and through them the more than 12 million individual shareholders in the UK.
2. ComPeer was launched in May 1993 to provide competitor benchmarking services. Its reputation has been formed by the widely acclaimed Survey of Private Client Stockbroking and Fund Management which now has 70 participants.
3. The APCIMS/ComPeer Private Client Activity Index charts the numbers of bargains conducted for private clients every quarter.

For further information call

Kevin Sloane, Head of Information, APCIMS (office 020 7247 7080; mobile 07917 406939; email kevins@apcims.co.uk)