Investment Banking News
Smartphones lure Gen Y to share trading
Ruth Liew
Gen Y-ers are leading the charge in the online broking boom, as younger Australians flock to their Android and iPhones to trade shares.
New data from research house Investment Trends found that six out of ten Australian online investors now use a mobile device to trade equities – up from 53 per cent a year ago.
Recep Peker, head of research – wealth management at Investment Trends, found the number of active online share investors climbed 4 per cent in the first six months of 2015 before the recent market volatility.
There are now around 620,000 active investors who have placed at least one trade through an online broker such as nabtrade and Commsec in the 12 months to June.
“The adoption of smartphones among Gen Y Australians is generally greater than older Australians, so some of the difference is explained by the greater penetration of smartphones,” he said.
“Their familiarity with this medium and the convenience offered translates into greater usage of mobiles for investing among younger Australians, whereas older Australians may feel relatively more confident making major decisions on a desktop device.”
The increase in online broking can be seen in companies such as CommSec, which posted a $77 millon profit and strong revenue growth last financial year.
REBOUND FROM LOSS
The broker, which is owned by Commonwealth Bank of Australia, rebounded from a loss in 2014 caused by one-off factors. CommSec’s brokerage revenue rose 12 per cent to $139.4 million.
Australia is in the middle of the pack compared with global peers when it comes to active online investors who use a mobile phone device to trade shares, the survey of 15,000 traders found.
Around 83 per cent of online investors in Hong Kong are turning to their phones when they invest in shares, while Singapore came in second at 81 per cent.
Australia is on par with the United States with 60 per cent of online users using phones, while the UK (51 per cent), Germany (28 per cent) and France (46 per cent) trailed behind.
INTERNATIONAL EQUITIES
The increase in online users come amid a burgeoning demand for international equities. Fund manager Henderson Group recently said Australian investors are increasingly pouring money offshore as they seek diversified income and combat a stagnant local economy.
Despite the high demand for global equities, online adoption remains relatively low. Investment Trends found that traders’ ownership of direct international shares are at their lowest among seven key economies surveyed at 14 per cent.
National Australia Bank’s nabtrade launched an integrated international share trading platform in April 2015. It received stronger satisfaction ratings for its international share offerings compared with other big four banks, Investment Trends said.
“When we combine the immense untapped opportunity and the increasing importance of accessing international shares among switchers, nabtrade’s strong early take-up could be just the start for them, in this emerging segment of the market,” said Irene Guiamatsia, analyst at Investment Trends.
AFR
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