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Shenzhen Stock Exchange (“SZSE”) has recently completed the 2012 Retail Investor Survey Report, in a move to collect first-hand information on investment behaviors and make pointed references to the improvement of investor education and services.
It has been the fourth annual survey conducted by SZSE since 2009. Co-designed by SZSE Investor Education Center and SZSE Comprehensive Research Institute, the questionnaires covered the contents of investors’ investment knowledge and self-awareness, investors’ trading habits and decision-making patterns, conditions of securities companies’ risk education and suitability of services. They were not only follow-ups of surveys conducted in past years, but also reflections of emerging hot issues.
To ensure the scientific and preciseness, SZSE has always been entrusting The Nielsen Company (China), a renowned research agency, to conduct the surveys. Nielsen undertook the work of questionnaires distribution, collection and statistical analysis. The survey started in December 2012 and lasted till January 2013. The target respondents were retail investors aged 25~55 who had traded stock or investment products of any type in the past 12 months. In order to facilitate meaningful analyses, the survey was carried out in representative cities selected from the nation’s six major areas in accordance with the geographical distribution of securities accounts and the age structure of investors. The selected cities are Beijing (North China), Dalian (Northeast China), Shanghai and Hangzhou (East China), Wuhan (Central China), Chengdu(West China), and Guangzhou and Shenzhen (South China).
Online accesses was provided to responding investors and quotas were set according to the actual structure of investors in different cities. Altogether 3,076 valid samples were collected in the survey, with standard error less than 3% (confidence level 95%). Over 350samples in cities of cross-section investors was collected with standard error less than 6% (confidence level 95%). Over 100 samples for the ChiNext investors were, collected with standard error less than 10% (confidence level 95%). (Notes: investors were divided into three categories in this survey, namely, the “cross-market-section investors”, the “ChiNext investors”, and the “non-ChiNext investors”. The “ChiNext investors” referred to investors who had traded on the ChiNext market and other boards of SZSE in the past 12 months. The “non-ChiNext investors” referred to investors who had not traded on the ChiNext board in the past 12 months. Besides, “securities investors”, “retail investors” or “investors”, etc. should all be referred to as “cross-market-section investors”.)
Major findings of the survey are summarized as follows:
1. Educational level for the cross-market-section investors continued to rise, and investors’ self-awareness about their investment competence tended to be objective.
In 2012, educational level for the entire investors continued to see a rising trend year by year. 71% investors had a bachelor's degree or above compared to 63% in 2011. To measure the basic knowledge of investment grasped by investors, the investment knowledge test in the 2009 survey was re-taken in this survey. According to the final scores, the cross-market-section investors scored 59 points (out of 100 points) in investment knowledge, indicating some improvement over that (56 points) in 2009. On the other hand, investors’ self-awareness about their investment competence tended to be objective, and self-assessment scores were very close to scores in the test. Investors questioned were asked to value the investment competence of their own from 0 to 100 points. The outcome indicated that their average self-assessment score was 62 points, only 3 points higher than that in the test.
2. Direct equity investment cooled down and portfolio wealth management became more diversified.
Several findings showed that direct investment in equity stocks cooled down in 2012. On the one hand, asset volume in investors’ securities accounts continued to fall. The average account balance for investors questioned was CNY 381,000, a significant decline from that (CNY 413,000) in 2011. Among them, the average account balance for ChiNext investors decreased from CNY 778,000 in 2011 to CNY 673,000 in2012, and the figure for non-ChiNext investors dropped from CNY 348,000 in 2011 to CNY 284,000 in 2012. Meanwhile, the role of stock investment continued to weaken in investor’s family asset allocation. In 2012, stock investment, accounting for 26.6% of families’ total investment value, continued to decline for two consecutive years (29% and 34.6% in 2011 and 2010 respectively). On the other hand, investors’ trading frequency was reduced compared to previous years. For instance, the average trading frequency for ChiNext investors jumped down to 5.4 trades per month in 2012 from 8.2 trades per month in 2011.
Investors’ asset portfolio tended to be more diversified in comparison. In 2012, investors questioned owned 4.21 investment products per capita, continuing to increase compared to the 3.84 in 2011 and 3.22 in 2010. Despite the slight decline in ownership of public fund units, other investment products had seen an increasing penetration, with financial products offered by banks and securities companies being the two major cash inflow channels, up 16% and 6% respectively over those in 2011.
3. Both investors’ expectation for return on equity investment and risk tolerance slightly declined.
As the survey shows, investors’ expectation for return on equity from investment and risk tolerance declined in 2012 in comparision with those in 2011. The investors’ expected annual average return for the ChiNext Board in 2012 was 26.2%, and average rate of tolerable losses was24.6%, 1.7% and 0.8% lower respectively than those in 2011. Investors’ expectation for investment return and risk tolerance for non ChiNext Board in 2012 records bigger decline from 2011 levels,or 3.7% and 3.9% lower than those in 2011 respectively.
4. Investors become further dependent on internet information channel when making investment decision. Recognition rate of SZSE’s Easy IR,an interactive online investor relations management platform, exceeded 40%.
Similar to the survey results of 2011, technical analysis on the price and turnover of equity was the major information source for the investors to make investment decision. Nevertheless, as the survey in 2012 shows, the percentage of information acquirement from such website media as stock chat-bar, forum and weibo by investors increase considerably, from 40% in 2011 to 48% in 2012, indicating gradually increasing influence of internet information channel on the investors.
When enquired about the acquaintance with the SZSE’s website Easy IR (an Internet-based interactive investor relations service), more than forty percent (43%) of respondents indicated that they were acquainted with the website. Among these respondents, 80% heeded specific listed company’s column on EasyIR because of their purchase or holding of the company’s stocks. This manifests that investors’ conversion rate from recognition of Easy IR to actually using it was relatively high.
5. The competition of securities brokerage was more intense, with their service quality continually enhanced.
Surveys of four years in a row show that the average commission of securities dealers in a continue declining trend. The average commission rate of securities dealers was 0.08% in 2012, 37.5% lower than the 0.11% in 2011, with the declining range apparently higher than those in the previous two years. This reveals the keener competition of securities brokerage business under the market environment last year.
Against such backdrop, the dealers’ services to customers were improving. More than seventy percent (73%) of respondents expressed that securities companies would actively contact them after they had opened an account in the security company. Three most frequently mentioned topics in the contacts were “recommendation of equity or investment products”, “information of the macro environment and the changes of policy” and “information of the trading risk”. As the statistics shows, dealers were more active when providing such services to the ChiNext investors, with average frequency of contacting the ChiNext investors (1.06 times per week) higher than that of contacting non-ChiNext investors ( 0.74 time per week).
6. Investors’ sense of shareholders’ rights and interests elevated comparing with that of previous year.
In order to understand the investors’ awareness and exercise of shareholders’ rights and interests, survey of 2012 follows the approaches of 2009 when investigating in this field. As the result suggests, compared with that of 2009, investors’ sense of shareholders’ rights and interests elevated, and with the major features as follow:
(1) The awareness of shareholders’ rights and interest enhanced. More than half (53%) of investors’ knowledge rights was exercised by “contacting the company and acquiring information via telephone, and website”. The percentage was 8% higher than that in 2009; similarly, there was 6%-9% range of increase in investors’ knowledge of such shareholders’ rights and interests as “online voting at general shareholders assembly”, “online performance presentation” and “suggestions or inquiry to the operation of the company” comparing with those in 2009.
(2) The exercise of shareholders rights by investors increase apparently. The exercise of shareholders’ rights witness a great leap in comparison with that in 2009 among the investors that are aware of the abovementioned shareholders’ rights and interests. The exercise of information acquirement by “contacting the company via telephone and internet” reaches 28%, 12 percent higher than that in 2009; the investors’ participation rates of the “online performance presentation” and “suggestions and inquiry to the operation of the company” are respectively 10 percent and 8 percent higher than those in 2009.
7. The relief of the investors’ rights shall be further improved.
Compared with the survey result of 2009, “reporting or lodging complaints to the relevant department” was still the most adopted approach of rights protection by investors when the investors’ lawful rights and interests were infringed by violation behaviors. 31% of respondents would choose this rights protection approach. This result was almost the same with that in 2009(32%). However, investors show lack of confidence for judicial relief, with percentage of choosing “calling the police or filing lawsuit to the court” by investors declining 4%. In comparison, the percentage of choosing “to act jointly with other investors whose rights being infringed by violation behaviors” reaches 22%, 7% higher than that in 2009. The percentage of investors “seeking social opinion support via exposure the violation behaviors in the website and media” grows 2 % compared with that in 2009.
8. Nearly sixty percent of investors were aware of the newly-issued regulations on delisting. 59% of respondents were aware of the regulations issued by SZSE at the end of 2012 regarding delisting : “Once a listed company enters Delisting Preparatory Period, it shall not stage or implement major assets restructuring and its listing status shall terminate within 30 days and shall be transferred in the OTC market.”
