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Russians Change Investments Habits
November 29, 2019 07:44


Brokers noticed a twofold increase in the share of investors with small savings on the exchange.

Brokers noticed an influx of Russians on the stock exchange with savings of up to 100,000 rubles. Their share doubled over the year.  Usual deposits no longer bring the same income due to lower rates.

The share of private investors with an account amount from 50,000 to 100,000 rubles on the stock exchange has doubled over the past year.  If in January-September 2018 there were 5% of such investors, then over the same period of 2019 - 10%.

Alfa-Bank and Tinkoff Bank confirmed the growth in customer flow with small savings. They are among the seven leaders in attracting private investors to the stock market this year, according to the Moscow Exchange. VTB, Sberbank and Otkritie Broker noted that more affluent customers also come to the exchange. Sberbank claims that the number of its clients in brokerage services has doubled over the year, with the mass and premium segments growing proportionally.

New investors start trading with small amounts and prefer to hold shares for a long time after purchase (buy and hold strategy - “buy and hold”).

One of the reasons for non-professional investors to come to the exchange was a decrease in bank deposit rates. During the period of growth in consumer lending, banks were interested in deposits, but after the Central Bank took measures to cool the market, banks became more interested in commission income from investment transactions. Therefore, deposit conditions will worsen. Banks will continue to restrain their growth, lowering the interest rate on them even stronger than the key one. The traditional “deposit” model of savings ceases to work, and clients will look for alternative investment methods.

The central bank intended to limit investment opportunities for non-professional investors and was considering various options. They  wanted to ban Russians with a small amount in the account to invest in shares of foreign companies. The stock market participants opposed this idea, but the head of the Central Bank, Elvira Nabiullina, was determined. In October, the Central Bank unexpectedly softened its position and admitted that unskilled investors would retain access to foreign securities, provided that they were placed on exchanges recognized by the Central Bank and included in international indices.

Author: Anna Dorozhkina

Tags: Russian society Russian banks Russian economy   

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