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."