Mondo Visione Worldwide Financial Markets Intelligence

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London Stock Exchange: Private Investors Continue To Take The Long-Term View

Date 12/10/2001

Almost 80 per cent of the share owning population believe investing in the stock market represents a good long-term investment.

These findings are part of The 2001 British Share Ownership Survey - an annual research study conducted on behalf of the London Stock Exchange and ProShare by MORI in association with World Investor Link - launched at briefings held at the London Stock Exchange yesterday.

Encouragingly, the bought-to-sold ratio of shares remains positive. Although for the majority of the 1990s private investors were selling shares more than they bought, this ratio was reversed during 2000 and investors have continued this pattern during the past 12 months.

Only 26 per cent of all shareholders have sold shares in the past 12 months, further emphasising the longer-term perspective of most shareholders. The majority of respondents continue to hold shares until they need the money or the shares reach the right price.

Chris Broad, Head of Broker Services at the London Stock Exchange said: "The MORI research indicates that the vast majority of private investors in the UK are sitting tight to ride out the current market conditions. They are understandably more cautious at the current time, but it is encouraging that their overall confidence in the stock market as a long-term investment is not diminished.

"The Exchange is committed to helping private investors by providing a range of services free of charge via the internet allowing them to become wiser investors, to monitor their investments and to do company research."

The research also reveals that private investors are taking a keener interest across a broad range of company communication.

Commenting on this, Diane Hay, Chief Executive of ProShare said: "When market conditions are good, private investors take a more passive approach to their investments, entrusting the company management to look after them. Current conditions, however, are prompting private investors to take a much greater interest in companies so they will be more likely to attend AGMs and to vote on company resolutions".

The findings indicate that investors are becoming more comfortable receiving communication from companies over the internet. 86 per cent of those who have ever sought company information via a company's website find it very useful.

Grant Woodall, Director of World Investor Link commented: "As interest in communications increases, the use of the internet will help to enhance this process. This is good news for both the investor and Company. New technology creates the opportunity to bring the two closer together".

Other findings from the research include almost 80 per cent of respondents participating in employee share ownership schemes still hold most or all of the shares they received as part of such schemes. Copies of the research are available from ProShare.