Home > World News > Investors ditch equities as euro debt crisis losses hit £24bn

Investors ditch equities as euro debt crisis losses hit £24bn

In the past three months investors sold £695m of their investments as trading hits six-year low.

Investors turn their back on equities as euro crisis deepens

Private investors have turned their backs against equities for the first time since early 2010.

The last quarter’s selling has been the most aggressive since September 2009. According to Capita Registrars, private investors hold around £213bn of equities, a loss of £24bn since their holdings peaked in May at £237bn. The extended economic and financial crisis of the last four years means shareholdings are no greater in cash terms than in May 2006, it said.

Charles Cryer, chief executive of Capita Registrars, said: “Investors are clearly getting worried – they have taken advantage of the FTSE’s recovery from its summer lows to sell shares for the first time since mid 2010.”

For the first time since May 2007, investors sold all sectors in net terms. There was also much less two-way trading than usual. As a result, the total amount traded was the lowest since Capita Registrars began its research six years ago, at just £695m, half the average quarterly total.

Mr Cryer added: “Investors have a dilemma on how best to protect their capital. The lack of investment alternatives that will protect the real value of investors’ savings means that investing in equities still makes sense for those thinking longer term, particularly as they are still providing an attractive income.

“It is clear though that should the markets find any stability, equities will continue to be a popular long term investment for retail holders.”

Resources companies saw the most selling (£249m), reflecting both their status as the largest sector in the index, but also perhaps fears over the outlook for the global economy. Between then, consumer goods and services saw investors sell £160m. Even defensive sectors such as health care and utilities were weak, Capita said.

Financials saw the least selling, despite their greater exposure to the financial crisis. This may reflect relatively low holdings by retail investors of stocks in this sector.

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