FRANKFURT (dpa-AFX) - Is the stock market boom in Germany already over? After reaching a record high in 2022, the number of shareholders fell again last year to slightly less than 12.32 million. A year earlier, a good 12.89 million people had shares, equity funds or exchange-traded index funds (ETFs) in their portfolios - more than at any time since 1997, when the Deutsches Aktieninstitut (DAI) began the survey. Was this just a flash in the pan?
The decline of around 570,000 "does not change the long-term upward trend", emphasized the Aktieninstitut on Thursday. For the fourth year in a row, the number of share savers has remained stable above the twelve million mark.
"In view of the turnaround in interest rates, persistently high inflation and a gloomy economic outlook, the number of share savers is a good result," summarized the head of the Aktieninstitut, Christine Bortenlänger. According to the calculations, a good one in six (17.6%) of the total population aged 14 and over was invested in the stock market in 2023. The highest rate in Germany was 20 percent in 2001.
Inflation and higher savings interest rates act as a brake
The institute attributes the fact that the number of shareholders fell from 2022 to 2023 to the fact that many people had less money to invest due to inflation, among other things. According to preliminary calculations, consumer prices in 2023 were on average 5.9% higher than in the previous year.
In addition, the rise in savings interest rates is likely to have lured investors away from the stock market. "Call money and fixed-term deposits made a comeback. Against this backdrop, the stable number of equity savers is a good result," stated the Aktieninstitut. Some investors probably also took advantage of the record level of the German share index at the end of the year to take profits. The Dax had risen to 17,003 points in mid-December.
Many younger people sold shares
The number of shareholders fell last year, particularly among younger people: 514,000 of those under 40 sold their share investments. However, according to the Aktieninstitut's interpretation, the current figures show that: "Investors have understood. Equities, equity funds and ETFs are indispensable for wealth accumulation and retirement provision, because a broadly diversified equity portfolio yields six to nine percent a year in the long term."
According to an analysis by DZ Bank, price increases were a key factor in private households in Germany becoming richer overall last year: "In terms of the German population's financial assets, this was reflected in increases in the value of shares, funds and certificates of around 200 billion euros." However, only a good 1.8 trillion of the more than 7.9 trillion euros in total financial assets are in shares and funds. According to DZ Bank calculations, savings deposits and cash account for 3.2 trillion euros.
Institute: Politicians must demand an equity culture
For years, there have been discussions in Germany about how to strengthen the equity culture. However, the launch of so-called generational capital, which is intended to strengthen the statutory pension with equity returns, has been postponed. "The false narrative of gambling on the stock market continues to haunt the corridors of Berlin," criticized the DAI. "The corresponding draft bill continues to move back and forth between departments. A fatal signal." In contrast to other industrialized nations, Germany is thus missing the opportunity to "flip the switch for better retirement provision for all citizens". In the USA, for example, the state has long been calling for more retirement provision via the capital market.
So it is no wonder that the shareholders of the 40 companies in the first German Borsen League are predominantly from abroad: Investors from abroad are in the majority at 24 DAX companies, as analyzed by the consulting firm EY for 2022. On average, one in five shares in a DAX company is held by shareholders from North America. This also means that a large proportion of the record dividend payments expected from companies in the index for the 2023 financial year - almost 55 billion euros according to calculations by Dekabank - will flow abroad.
DAI boss Bortenlänger warned: "The government must not drag its feet any longer and must finally introduce generational capital this year."/ben/DP/mis
