The share of individual investors in the stock market decreased to 72%

The share of individual investors in stock trading on the Moscow Exchange in March fell to one of the lowest levels since the beginning of 2022. This is primarily due to the entry of corporate and institutional investors into the market. Experts, in particular, point to growing interest from treasuries, non-state pension funds, and management companies. Analysts expect that the share of individuals will continue to decline, fearing a “bubble inflation” due to excess liquidity of large investors.

According to the Moscow Exchange, the share of individual investors in the stock market has decreased to 72%. This is one of the lowest figures since the beginning of 2022. According to the Central Bank, on some days in March the share of private investors fell to 66%. At the same time, in absolute terms, trading volumes remained at the same level, sometimes exceeding 100 billion rubles. in a day.

Experts interviewed by Kommersant attribute the situation to the activation of institutional and corporate investors in the market. A significant part of private individuals’ accounts for brokerage services remains zero, explains Dmitry Lesnov, head of the client service development department of Finam Financial Group.

According to the Central Bank, at the end of 2023, more than 88% of accounts had balances below 10 thousand rubles, with 65% of accounts remaining zero.

In order to “change the proportion between individuals and legal entities, in principle, not so much money is needed from legal entities,” explains Mr. Lesnov.

The investment company Go Invest believes that the main reason for the decrease in the share of individuals in trading in March is the increased activity of non-state pension funds, which were able to sell shares of strategic enterprises. Company experts note “abnormally high” volumes in Rosneft, Tatneft, and Gazprom Neft.

In addition, trading in TKS Holding shares began in March after redomiciliation.

In the first trading days, the share of institutional investors could be very high, which was reflected in the overall balance during the month, Go Invest noted.

Arikapital investment strategist Sergei Suverov draws attention to mutual funds: “They attract more money, become more active players” (see “Kommersant” dated April 8).

Analysts also point to increased activity in corporate treasuries. Independent expert Andrei Barhota notes that the participation of corporate structures in new IPOs provides treasuries with quick income. An indirect confirmation of this can be the numerous oversubscriptions for shares of new issuers.

Treasury departments for working with liquidity of companies really pay attention to stock market instruments, because they provide quite interesting options for asset placement, confirms Dmitry Lesnov. “Every month there are more and more companies that want to place liquidity and receive stock market instruments,” he says.

Experts believe that the current decline in the share of individuals is just the beginning of a trend. According to Mr. Lesnov, it will “decrease systematically, without sudden jumps.” Legal entities have large assets and liquidity, so “it’s easier for them to increase their share of volumes than for individuals, who really have quite limited financial resources,” he explains.

A number of experts believe that the trend creates certain risks. Independent economist Konstantin Tserazov explains that for legal entities such investments are forced, that is, “under other circumstances, the funds would most likely be invested in other, most likely, foreign assets.” Therefore, the expert believes, there is a risk that the influx of excess liquidity “will not lead to the disclosure of the real value of undervalued assets, but will inflate a bubble.” As it grows, Mr. Tserazov explains, “there may be no attractively priced assets left, and buying overvalued ones in an attempt to make money work will be fraught with risks associated with the prospects of a bubble burst.”

Ksenia Kulikova