During the past three years, 830,000 Belgians traded on the stock market. That number is now on the rise: in the first three months of 2021, the number of unique investors had more than doubled relative to the first quarter of 2019. The number of new investors at the beginning of 2021 was 50% higher than at the beginning of 2019. These are among the findings of a new study conducted by the Financial Services and Markets Authority (FSMA) on the behaviour of Belgian retail investors. This study was presented today during a webinar that the FSMA organized on the occasion of the publication of its tenth annual report.
In May 2020, the FSMA published an initial study on investor behaviour. That study showed that during the first lockdown, the number of Belgians who traded in BEL20 shares had increased fivefold compared to the period before the crisis. Moreover, young and infrequent investors were much more active during the lockdown period.
At a webinar held today with almost 800 participants, the FSMA unveiled the results of a more extensive follow-up study. The latter is based on an analysis of the data in reports received by the FSMA between January 2018 and March 2021 on stock market transactions by retail investors. The key points from this study are set out below.
More than half a million Belgians trade in shares
Belgians carried out 29,825,716 transactions in the period under study. Across all financial instruments (shares, bonds, options, etc.), there were 830,000 unique Belgian retail investors in total, measured by the number of securities accounts. Around 550,000 of them traded in shares. On average, Belgians traded in nine different instruments.
Number of unique investors in BEL20 has doubled
Between the beginning of 2018 and the end of March 2021, 330,000 unique investors invested in BEL20 shares. Around 80 per cent of them also traded in other financial instruments. The number of unique investors who carried out at least one transaction in a BEL20 share rose enormously during the first lockdown.
Even after that period, we saw a further increase in those figures: in the first quarter of 2021, the number of unique investors more than doubled as compared to the first quarter of 2019. At the beginning of 2021, still other new investors began to trade on the market. In comparison with the beginning of 2019, the number of new investors had increased by more than 50 per cent.
Volume traded in BEL20 rose during the coronavirus crisis
Since the coronavirus crisis, the volume of BEL20 shares traded has risen sharply. Over the entire 2018-2021 period, the volume amounted to an average of 625 billion euros per month. From mid February 2020 to the end of March 2021, that amount stood at an average of 933 billion euros per month.
The rise in the volume traded was not limited to the first lockdown. At the start of the second lockdown, in early November 2020, the volume rose again, but less dramatically than during the first lockdown. Unlike in that first period, this time more shares were sold than bought.
ETFs also gained in popularity among retail investors
The study also measured investments in Exchange-Traded Funds (ETFs), which are listed funds that track the performance of one particular index. In total, around 360,000 unique Belgian investors traded in ETFs. In all, they carried out 1.8 billion transactions. A substantial part of the transactions in ETFs took place via discretionary management, but since 2020, retail investors have also been discovering ETFs.
GameStop, Blackberry and AMC
The study also examined the behaviour of Belgians in the face of the hype, mainly in the United States, around shares such as GameStop, Blackberry and AMC. The number of Belgians who invested in those shares was very limited. Between 1 December 2020 and 12 February 2021, a total of 4237 Belgians traded in GameStop, 1580 in Blackberry and 4058 in AMC. It was mainly men under the age of 35 who were trading in those shares.
Jean-Paul Servais, the Chairman of the FSMA, observed: ‘This study shows not only an increased interest in the stock market on the part of Belgians. But it also illustrates the modern techniques of data analysis that enable the FSMA to make optimal use of the information available to it. In addition to this study, we are working on other applications that make it possible to use the data available to us even faster and more efficiently, convinced as we are that this is an essential tool for the supervisor of the future.’