Internet traders make a comeback
11-08-2003
by Matthew Clark

Despite the technology slump and the prolonged downturn in equity markets, British people are making trades over the Internet in record numbers.

The news comes from the Association of Private Client Investment Managers and Stockbrokers (APCIMS), an organisation representing stockbrokers and investment managers, which said on Monday that the number of people with on-line trading accounts in the UK has reached an all-time high of 395,000 for the second quarter of 2003. During the height of the dot-com/high-tech boom, the number of people making trades over the Net in Britain stood at less than 200,000.

"These are very encouraging figures for the entire industry," claimed APCIMS chairman Mark Powell. "There is a growing optimism in the market, while the need to invest for the future becomes ever more important for investors," he continued, adding that APCIMS members remain positioned to provide various financial services to investors.

Other important statistics in the ComPeer quarterly survey of UK private client activity showed that private client trading volumes were up by 21.3 percent on the first quarter and the total value of shares traded rose by 20.2 percent over the same period.

UK on-line trading volumes, meanwhile, were up from the usual mark of about 500,000 trades per quarter to more than 700,000 in Q2 -- a 42 percent rise in three months. In more good news for stockbrokers, the markets and investors, the report said that on-line trading accounted for more than one-third of all execution-only trades during the second three months of the year.

In the wake of the tech fallout, it was thought that the days of Internet-based execution-only trades were numbered as millions of novice investors were burned in the market carnage in 2000 and 2001. But some are now saying the new figures not only indicate that Web trading remains strong, but also that there is a renewed faith in the economy.

Similar signs have emerged on the other side of the Atlantic, where the term "day trader" was coined during the boom years to describe those who had given up other jobs to become full-time Web-connected stock traders. Although day trader numbers in America are still low compared to 2000, signs from leading e-stockbrokers indicate a health in the sector similar to that in the UK.

E-Trade, for example, recently said that the activity of its active traders jumped 42 percent in the second quarter from the first quarter, while Schwab's CyberTrader unit saw a 28 percent lift over the same period. Interestingly, CyberTrader's users logged on to their accounts 500,000 times in June, up from 300,000 in March, alongside a bevy of other growth statistics, including higher numbers of trades per day and a bigger account base over last year.