Fewer people take a punt on Stock Exchange, poll shows

By Deborah Hill Cone

Friday 22nd February 2002

The percentage of people who own shares listed on the local sharemarket is sliding, a new poll out today shows.

The National Business Review-Compaq poll found 27% of people own shares listed on the Stock Exchange, down from 31% when the same question was asked two years ago and 34% when it was asked in 1994.

But for those who do own shares there is no change in the amount of share trading activity.

Those who said they were shareholders were asked whether they had bought or sold shares listed on the NZSE in the last six months - 30% said they had, while 69% said they hadn't - the same result as when the question was asked in May 2000.

And there was a slightly more positive prediction about the direction of the Stock Exchange. Overall, 65% of people said they believed the sharemarket would stay at about the same level or rise in the next six months - up from 59% when the question was asked in both 1992 and 2000.

Fourteen per cent of people picked the sharemarket would drop in the next six months, a smaller negative turnout than when the question was asked in 2000 (24% said it would go lower).

And those who owned shares were more positive about the market's prospects.

Forty-one per cent of those who own shares predicted the market would go much higher or a little higher in the next six months and a further 41% predicted it would stay at the same level.

The NBR-Compaq poll finding comes as there are moves in progress to revitalise the NZSE post-demutualisation.

The NZSE has talked of various plans to boost the profile of the exchange and encourage mum and dad investors to put their money into local shares.

But the NBR-Compaq poll suggests despite a tightening of regulatory controls, there is a lingering negative perception that small investors are not treated fairly.

Seventy per cent of people said big investors could manipulate the sharemarket, down from 80% who took that view in 2000.

Only 5% of people said all investors were treated fairly.

The scepticism about how fair the market was higher among people who owned shares - 86% of those who owned NZSE shares thought the big investors could manipulate the market.

The NBR-Compaq poll shows the people most likely to own NZSE shares are aged over 60 (33%), professionals and managers (35%), the self-employed (39%) and people who earn $50,000-70,000 (55%).

Most unlikely to own shares: people in Auckland (23%), people aged under 30 (8%) and Maori or part Maori (16%).

Act New Zealand voters are the most likely to own NZSE-listed shares (46%), followed by National voters (34%). Fewer Labour (25%), the Alliance (19%) and Green (17%) supporters own local shares.

The NZSE does its own research, which in 2000 found the total level of local share ownership at about 36%, of which 20% was direct investment in shares and 16% was investment through managed and superannuation funds.

Stock Exchange managing director Bill Foster said he did not read too much into the trend as he believed the level of share ownership was probably quite steady, although the drop-off might reflect the move of some stocks, such as BIL Investments, to list offshore.

The biggest problem in encouraging people to invest in NZSE-listed stocks was New Zealanders' low level of savings. The NZSE had introduced some new measures to promote investment in locally listed shares such as the New Capital Market and the debt market.

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