CDP sees highest 12-month surge in new accounts

Brokers are crying over the tough mkt conditions but could this be the prelude to the penultimate phase of bull run?

http://www.businesstimes.com.sg/premium/...s-20140630

PUBLISHED JUNE 30, 2014
CDP sees highest 12-month surge in new accounts
Depository now has 1.6m members and about half actually hold some shares
BYR SIVANITHY
sivan@sph.com.sg @RSivanithyBT

Ms Gaspar: Important for retail public to gain awareness in investing in stocks.
RETAIL investor interest in the stock market is growing. In the past 12 months, more than 68,000 new Central Depository (CDP) Accounts have been opened, the highest 12-month addition ever and one which brings the total number of CDP acounts to 1.6 million.
At a press briefing last week on Singapore Exchange's ongoing retail initiatives, SGX's senior vice-president for retail investors, Lynn Gaspar, said that about half of all CDP accounts or a record-high 844,000 actually held some shares.
"Subscription to SGX's My Gateway's e-newsletter over the past 12 months has risen 21 per cent to 187,000 and the increase in unique visitors to our website has been 45 per cent over the same period," she said.
However, she added that, notwithstanding the increase in interest, the proportion of Singaporeans who invested in the stock market is still low when compared with other markets.
"Only about 8-10 per cent of the population is in stocks, compared with 20-25 per cent in Hong Kong and 15-20 per cent in Australia," said Ms Gaspar. "If you assume the potential retail investor population to be about three million people, only about one third has some direct involvement in stocks while 62 per cent has never been in the market. Of these people, about 400,000 are interested in getting into the market. Based on a survey we conducted in 2012, we found that the barriers to entry for these people are they don't know how to start, don't know where to start and don't have the time or money."
The exchange believes it is important that the retail public gain awareness of how to invest in stocks.
"Singaporeans are today concerned with whether they have enough savings for retirement" said Ms Gaspar. "I believe the question should really be: how can I make my savings work harder for me? The key lies in starting early and having a diversified portfolio, including investing in shares over the long term."
To help interested but inexperiened retail players gain some insights into the stock market, SGX has partnered local firm TradeHero, which offers a mobile market trading application that can be downloaded onto phones.
The exchange is also offering up to $198,000 in prize money in its StockWhiz contest which is open to Singapore residents aged 18 years and above, the aim of which is to allow the public to learn to trade with virtual money.
"TradeHero allows investors to trade using real-time prices," said Ms Gaspar. "We feel this is a great chance for the public to gain risk-free experience on how to trade."

Thank you CityFarmer. edited to some "old" news for comparison.
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Not many benefit from bull run

August 4, 2007 Saturday

Teh Hooi Ling

In the Singapore market, between July 17 and Aug 2, about $60 billion worth of wealth was wiped out from the stock market.
And this came at a time when the number of new investors in the market is at a seven-year high.

For the month of July, just under 6,200 new Central Depository (CDP) accounts were opened. That's the highest since July 2000 when exactly 6,200 new accounts were registered, according to numbers from the Singapore Exchange.

Compared with the previous month, the jump was about 40 per cent, and compared with a year ago, it was a surge of 238.4 per cent.With 250,000 active accounts, it means that only 7.4 per cent of the adult population are active in the stock market.

Meanwhile, the number of active CDP accounts - this is defined as those that have made at least one buy or sell transaction in the last three months - is at a 71/2-year high.
Some 250,000 accounts were active in the month of July. That's a 6 per cent increase from the month of June and a jump of 60 per cent from a year ago.
The previous high was in September 1999 when about 290,000 accounts were active.
However, the level of active accounts is still a far cry from the peak chalked up in June 1999, when a whopping 486,000 CDP accounts were active.
June 1999 was some nine months after the stock market made its remarkable recovery following the Asian financial crisis which lasted for nearly a year.
It was also after the market had recovered by some 130 per cent.
The number of active trading accounts broke through the 200,000 level only in January this year, after averaging below 160,000 between 2001 and 2005.
The increased interest in the stock market this year came after four years of sustained upmarket, which has seen the general price level rise by 141 per cent.
So it would seem that the general investing public is a step slow in recognising a bull market, and tend to come into the game rather late.
I plotted the SES All Shares Index against the number of active CDP accounts between March 1998 and July 2007.
As can be seen from the chart, the number of active accounts does not rise as quickly as the market price level. For example, in the three years between January 2004 and December 2006, the stock market was on a one-way trek northwards. But, there was no significant increase in the number of active CDP accounts, up till January this year.
Meanwhile, activities do fall sharply, in tandem with the market when prices decline.
There is a saying that when almost everyone is in the market, that's the time to be worried.
But the fact is, with active accounts at 250,000, the percentage of population who has benefited from the 4-5 years of bull run that we've had can't be said to be significant.
Based on the latest government numbers, Singapore now has a population of 4.5 million. This is up half a million from 2000.
The rough estimate is that 75 per cent of the population is above 20 years old. This gives an adult population of 3.4 million. With 250,000 active accounts, it means that only 7.4 per cent of the adult population are active in the stock market.
And if we assume that an average of three adults are in a household, the percentage of households which have been active in the local stock market is only 22 per cent.
Over the long term, stocks provide more returns than cash or fixed income instruments.
With the end of the iron rice bowl era, and increasingly life expectancy, making sure that one has sufficient financial resources to tide through the rough patches and old age should rank as one's high priority in life.
And growing one's accumulated wealth through wise investments is one integral part of financial planning and everyone should take an interest in it.
Definitely more should be done to increase the general public's participation in stocks if the rate is only 20-odd per cent.
Of course, the figures do not include those who might park their money in unit trusts.
Still, in the US, the world's leading financial centre, half the households do not own any stocks, directly or indirectly.
There are many explanations for the low participation rate. One reason is the costs involved. The costs encompass trading costs and time and money spent keeping up with market developments and so on. Another reason quoted is that one does not know enough about the market to invest.
But empirically, wealth is by far the most signicant determinant of households' participation - lower income groups just do not have the excess cash to invest.
However, the recent market turbulence notwithstanding, for those who have savings, however small, taking an interest in growing one's money through wise and sound investments is an imperative in today's world.

The article has already been posted by GG. I merged the two.

Regards
Moderator

(30-06-2014, 03:44 PM)zf87 Wrote: RETAIL investor interest in the stock market is growing. In the past 12 months, more than 68,000 new Central Depository (CDP) Accounts have been opened, the highest 12-month addition ever and one which brings the total number of CDP acounts to 1.6 million.

At a press briefing last week on Singapore Exchange's ongoing retail initiatives, SGX's senior vice-president for retail investors, Lynn Gaspar, said that about half of all CDP accounts or a record-high 844,000 actually held some shares.

"Subscription to SGX's My Gateway's e-newsletter over the past 12 months has risen 21 per cent to 187,000 and the increase in unique visitors to our website has been 45 per cent over the same period," she said.

However, she added that, notwithstanding the increase in interest, the proportion of Singaporeans who invested in the stock market is still low when compared with other markets.

"Only about 8-10 per cent of the population is in stocks, compared with 20-25 per cent in Hong Kong and 15-20 per cent in Australia," said Ms Gaspar. "If you assume the potential retail investor population to be about three million people, only about one third has some direct involvement in stocks while 62 per cent has never been in the market. Of these people, about 400,000 are interested in getting into the market. Based on a survey we conducted in 2012, we found that the barriers to entry for these people are they don't know how to start, don't know where to start and don't have the time or money."

The exchange believes it is important that the retail public gain awareness of how to invest in stocks.

"Singaporeans are today concerned with whether they have enough savings for retirement" said Ms Gaspar. "I believe the question should really be: how can I make my savings work harder for me? The key lies in starting early and having a diversified portfolio, including investing in shares over the long term."

To help interested but inexperiened retail players gain some insights into the stock market, SGX has partnered local firm TradeHero, which offers a mobile market trading application that can be downloaded onto phones.
The exchange is also offering up to $198,000 in prize money in its StockWhiz contest which is open to Singapore residents aged 18 years and above, the aim of which is to allow the public to learn to trade with virtual money.

"TradeHero allows investors to trade using real-time prices," said Ms Gaspar. "We feel this is a great chance for the public to gain risk-free experience on how to trade."

(30-06-2014, 07:35 AM)greengiraffe Wrote: "TradeHero allows investors to trade using real-time prices," said Ms Gaspar. "We feel this is a great chance for the public to gain risk-free experience on how to trade."

During my good old days in poly, there are exams base on trading results, technical analysis and book keeping...........that was on desktops though, I cant imagine how distracting it is on apps haha

Is it time to sell?

When I read this news the first thing comes into my mind is to sell all shares.

I believe this may be due to the property curbs which drives hot money to overseas property & stock market...

Unfortunately, there is a mismatch between the new CDP accounts and the trading activities on the market.

Hence, I m yet to be worried. My timeline remains an exit before or during 2017.

What the news suggest is the amount of money waiting on the sidelines to be unleashed.

GG

(30-06-2014, 10:48 PM)greengiraffe Wrote: Unfortunately, there is a mismatch between the new CDP accounts and the trading activities on the market.

Hence, I m yet to be worried. My timeline remains an exit before or during 2017.

What the news suggest is the amount of money waiting on the sidelines to be unleashed.

GG

Why 2017?

Increase of CDP account opening , yes but look at the trading volume . Have been down for many months and more than 50% of the remisiers are earning lees than 1K per month as confirmed by the president of remisier society.