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Two-thirds of Brokerage Accounts Opened by Russians are Empty
February 18, 2020 17:24

A record inflow of population to the stock market did not lead to the same increase in investment - two-thirds of Russian brokerage accounts are empty. Brokers claim that it is the natural result of the explosive growth of open accounts after falling bank rates.

Two-thirds of brokerage accounts opened by Russians are empty. This is the result of a survey of major investment companies conducted by the National Association of Stock Market Participants. According to NAUFOR, the study participants accounted for 95% of clients of brokerage companies.

According to analysts, in 2019 the share of funded ordinary brokerage accounts decreased from 40% to 33%, despite the fact that at the end of 2017 there were 44% of them. The share of replenished individual investment accounts (IIAs, brokerage accounts with tax breaks) decreased even more - from 45.5% to 27%. In total, in 2019, the population put 1.6 trillion rubles on brokerage accounts. Most of the funds were invested in IIS (76 billion rubles).

Vedomosti notes that the fall in bank deposit rates, the growth of the stock market last year and the development of brokerage mobile applications led to a record influx of private investors, but did not contribute to the same increase in investment. NAUFOR President Alexei Timofeev explained that many accounts "are opened automatically or semi-automatically." At the same time, a significant part of them is in demand only after some time, he added, expressing confidence that the share of funded accounts will grow. The deputy head of NAUFOR, Ekaterina Andreeva, noted that some investors do not immediately replenish the IIMS, since they can withdraw funds only three years after opening - otherwise the investor will not be able to receive a tax benefit.

According to Timofeev, by the end of last year, private investors held 3.2 trillion rubles in brokering and trust management accounts (more than 220 billion rubles of them in IIS). For comparison, at the end of 2018, 2 trillion rubles were placed on accounts, including 120 billion rubles on IMS.

Some Russians open accounts out of curiosity and do not plan to make transactions, Konstantin Shulga, head of Sberbank’s electronic distribution development department says. He claims that Sberbank “is in the average market range” in terms of the proportion of accounts that are funded, but the number of accounts should increase significantly as investors learn. Vladimir Potapov, chief executive officer of VTB Capital Investments, said that 44% of accounts were funded at VTB, although a year earlier they had been slightly larger.

According to the director general of Otkrytie Brokers, Vladimir Krekoten, increasing the proportion of empty accounts is not a problem. “This is a natural result of the explosive growth of open accounts,” Krekoten noted, as  investor now requires less effort to open an account than several years ago. According to NAUFOR, about 70% of new customers who entered the stock market in 2019 used online services offered by banks. The head of “Opening a broker” also noted that among the empty accounts there are those from which the investor has already withdrawn funds, having achieved his goal or being disappointed in investments.

Author: Anna Dorozhkina

Tags: Russian economy     

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