The AMF survey shows that stock market operators are leaving the market
A study conducted by the Autorité des marchés financiers (AMF) showed that the number of retail investors active on the stock market fell by a third in the third quarter of 2022.
The eighth edition of the AMF’s Active Retail Investors Scoreboard saw a lower influx of new retail investors, bringing the total number of retail investors with brokerage accounts to nearly half of its annual high for the past three months.
During the quarter just ended, 600,000 traders placed at least one order to buy or sell shares. While the stock market was off to its worst quarter since 2008, the figure was down 35% from the previous quarter. Judging by metrics from previous years, curiosity about stock prices has returned to pre-pandemic levels.
“The uncertainties weighing on the markets are reflected in less activity by retail investors. With markets falling for the third consecutive quarter, retail investors appear to have taken a wait-and-see approach and maintained their positions,” the AMF said.
Other highlights show that stock buyers fell 19% to 485,000, their lowest level since the third quarter of 2020. In particular, the AMF survey showed that 39,000 had never placed a stock market order before or had been inactive since January 2018. Following the market decline, the number of stock sellers fell sharply to a level significantly lower than the number of buyers, by 43%, to 362 000.
A previous AMF report showed savers activity capped a record year in 2021, with 1.6 million accounts completing at least one equity trade, a 19% increase from a year earlier. .
Retail transaction volumes have also more than doubled over the past two years compared to turnover seen in 2018 and 2019. This came as market volatility and Covid lockdowns created an opportunity unique for regular investors to participate in the unprecedented stock market rally.
The flow of new investors remained strong but seems to have stabilized around 50,000 per quarter, notes the AMF.
These annual volumes match those reached in 2020 when many French people turned to trading as central banks lowered rates to record lows, making bank deposits less attractive.
Much of this growth has been driven by new investors. However, the AMF has noted that these new investors are not only young people, they are also older people, but discovering investment for the first time.
Retail investment was on the rise even before the Covid-19 crisis hit the world. But the new virus has provided just the boost needed to send young investors into the financial markets.