Low share prices are tempting small investors
Stockmann has gained the largest number of new private shareholders since June
Experience shows that a small Finnish private investor does not like to sell his or her shares during rate falls.
Instead, many take the opportunity and buy more shares that they regard as cheap.
This seems to have happened even this autumn. After studying the companies that are favoured by private investors, the Finnish Foundation for Share Promotion noticed that between June and September, the number of small investors has increased in many Finnish listed firms. Only a few of them have actually lost private investors.
The investors were most interested in the retail concern Stockmann.
The share register of Stockmann recorded about 10,000 new stockholders in three months, showing an increase of more than 20 per cent.
The company reports that the increase is attributable to the loyal customer share options granted on the basis of the total purchases made in the company’s stores.
The eagerness to exercise their options and subscribe for shares has apparently been influenced by the fact that the company’s Series B more exchangeable shares have come down by 52 per cent in value in the period of the past 12 months. The investors have probably regarded the acquisition as profitable.
In addition, Stockmann is known as a good payer of dividends.
Its major stockholders include Swedish-language foundations which need a regular flow of dividends for the payment of grants and scholarships.
On the list of the so-called "people’s shares", Stockmann climbed up to place eight, with more than 53,000 private investors.
The second in the list is Nokia, after the company’s number of minor shareholders increased by around three per cent in the period from June through September.
However, the interest in Nokia’s shares was no longer at the same level as at the beginning of the year, when the fall in the stock price brought more than 20,000 new private stockholders to the company.
On the other hand, according to statistics, the current shareholders are not willing to give up their holdings in the company.
Other companies that interested small investors included forest company Stora Enso, Talvivaara Mining Company, engineering company Wärtsilä, and oil refiners Neste Oil.
Recently, Talvivaara has gained negative publicity because of environmental concerns.
However, the furore had not yet been raised in September, where the statistics made by the Finnish Foundation for Share Promotion ended.
The incentive to buy Talvivaara’s shares might have been the around 60 per cent fall in the company’s share price within the year.
Respectively, Stora Enso’s share price has come down by more than 40 per cent, while that of Neste Oil has dropped by some 30 per cent, and the price of Wärtsilä’s share has fallen by 20 per cent. All these companies are known as good dividend payers.
In the list, those who have lost are financial institutions.
Both Sampo Bank and the OP-Pohjola Group have lost a small number of private investors.
Nordea and TeliaSonera are not included in the study, as they have been registered in Sweden.
According to Sari Lounasmeri, CEO of the Finnish Foundation for Share Promotion, the foundation has noticed that in unstable times, Finnish small investors put their money into bank accounts or invest in shares, which are easy to convert into cash if the need arises.
Instead, long-term contractual saving, including pension saving, tends to decline.
The Finnish Foundation for Share Promotion