Australia - A Nation Of Shareholders

Total share ownership in Australia has increased from 40.3 percent of the adult population to 53.7 percent, the Share Ownership 2000 survey released by Australian Stock Exchange (ASX) has revealed. The survey shows that an estimated 2.1 million Australians have entered the sharemarket directly or indirectly since the October 1998 survey. Approximately 7.6 million Australians now own shares themselves, or through a manged fund or personal superannuation. Australia now ranks first among similar economies worldwide in terms of the proportion of the population who own shares. Since the last survey, the biggest increase has been in the number of Australians with a direct ownership of shares. An estimated 40.6 percent of the adult population - representing 5.7 million Australians - now own equities themselves. Since October 1998, an estimated 1.3 million Australians have become shareholders for the first time. This increase continued the trend that has seen 2.9 million Australians - a fifth of the adult population - directly enter the sharemarket since 1997. Several factors have contributed to the large number of new entrants to the sharemarket since the last survey, increased access to information about the market being a major contributor. Another was the high number of floats on the market (142 new listings in 1999), and the Telstra 2 IPO. An estimated 1.8 million Australians participated in the T2 float, including 321,000 who bought shares for the first time. The increase in shareholders can be seen across the board. While more men than women continue to own shares directly (45 percent to 36 percent), the increase since the last survey has been similar in both groups. Direct share ownership among both men and women has doubled since 1997. This breadth is also reflected across age groups. Less than three years ago those aged 55-or-over were the predominant category of direct share ownership. They have been replaced by those aged 35-54. There are now 1.5 million Australians aged 18-34 who directly own shares, approximately the same number as those aged 55-or-over. The increase in share ownership is also reflected across geographic boundaries. There is a very similar proportion of direct shareholders across all states, all of them reflecting the upward trend since the 1998 survey. More significantly, there has been a similar increase in direct share ownership in both the metropolitan and regional areas, at 42 percent and 39 percent respectively. This reflects not only the nationwide breadth of interest in the market, but also the greater ease of access to information about shares, and to the sharemarket itself, through the Internet and other avenues. Shares are now seen as an important component of a balanced investment portfolio, representing the third most popular form of investment (after superannuation and cash). They account on average for 13 percent of all funds invested by Australians. Not only has the profile of share owners changed significantly in the past year, but so has the level of their investment. Since 1998 there has been greater diversification, with the average number of companies held in a portfolio increasing from three to six. However, many investors still hold a small range of shares. An estimated 62 percent of direct share owners hold three stocks or less in their portfolio. A large proportion have also entered the sharemarket with relatively small amounts. An estimated 42 percent have a portfolio valued at $10,000 or less. While increasingly likely to own shares, Australians are still relatively passive investors. More than one third (36 percent) of shareholders have not bought or sold shares in the past 12 months, and 29 percent traded on the sharemarket only once. However, since the last survey the average number of trades has doubled - from less than one a year to 1.8 trades a year.