On Thursday 7 May 2020 The LSE and Primary Bid ran a webinar on How important is the Individual to UK PLC in the current climate?
There was an impressive panel made up of:
- Gavin Oldham, Chairman – Share Centre
- Richard Wilson, CEO – interactive investor
- Angela Knight CBE
- Andy Edmond, CEO, Equity Development
- Marcus Stuttard, Head of UK Primary Markets and AIM – London Stock Exchange plc
- The Chairman was James Deal, COO – PrimaryBid
The topics discussed were:
- The daily trading flows and market impact from the retail investor
- How to broaden the shareholder register beyond the core institutions
- How technology can improve communication and facilitate participation in capital raisings with a broader shareholder base.
My summary of the points where there seemed to be general agreement:
- the retail investor is important,
- retail investors are mainly sensible long term investors,
- day traders are a tiny minority, but make a lot of noise on bulletin boards,
- companies engaging with retail investors is a good thing,
- all investors should be treated equally, i.e. large institutional investors and retail investors should have the same rights and treatment
- the new normal is doing things remotely. This will not be temporary.
- retail investors have been net buyers of the market in March and have made up a large proportion of trading (c20% in March v 5% previously): currently 2-3:1 net buying behaviour by retail investors.
Angela Knight impressed me and made a number of good points, including the point that too many regulations are to protect clients of companies, not to allow clients to make their own choice. I agree -there is a danger of the nanny state. Some regulation is necessary, but the cost benefit of much is questionable.
Richard Wilson said that
- ii now trade one seventh of all UK shares traded.
- ii March volumes were 3 times normal levels.
- ii attracted £1bn of new money in March, which went roughly 60% into equities and 40% ETFs, which meant that there was net zero into funds and investment trusts.
- Many previous dormant customers were re-emerging
- Of their 330,000 customers <50,000 trade more than 30 times per year: 2% trade > 100 times a year. The majority of ii customers are discerning, thoughtful long term investors.
- One third opt in to the ii free service of voting and information rights (i.e. c. 100,000). Of these about 20,000 exercise their rights in a year.
Cliff Weight, Director, ShareSoc