ASX media release - AMP adds new investors to the market

1 February 1999

The listing on the Australian Stock Exchange of AMP Limited in June 1998 added 730,000 first-time investors to Australia’s share market, according to a new share ownership study released today by ASX.

Around 1.6 million Australians, or 11 per cent of the adult population, received shares as part of the AMP demutualisation and listing. As a result, direct share ownership rose from 28.5 per cent of adult Australians to 31.9 per cent.

Previously, the highest number of share owners entering the market at one time was through the partial float of Telstra, when 559,000 of the nearly 2 million who purchased shares in Telstra were new to the market.

Another significant float reflected in the survey was the New South Wales TAB listing, in which approximately a half-a-million people purchased shares and 24,000 were first-time investors.

At the time of the survey, 40.3 per cent of all adult Australians had consciously decided to own shares, either directly or indirectly. That represents more than 5.5 million Australians. This is in addition to contributions to superannuation funds.

The latest results form part of ASX’s ongoing comprehensive research into private investors.

"The results show that interest in the share market is still growing. The proportion of shareholders in the community has more than doubled in only seven years," said ASX Managing Director Richard Humphry.

"It also reflects a much greater investment sophistication in Australia. In June last year, the Westpac/Melbourne Institute Quarterly Prospects for Consumer Demand Survey revealed that, in the judgement of Australians, shares were the wisest place to invest new savings."

ASX provides a wide range of services for private investors, including education courses, a national Customer Service Centre (1300 300 279) and an Internet site, ASX ShareNet at http://www.asx.com.au

Key findings of the study include:

  • Total share ownership now stands at 40.3 percent of the Australian adult population. This represents more than 5.5 million Australians, including 4.4 million specifically involved in direct share ownership.
  • The proportion of Australians with direct exposure to the share market has increased slightly from 28.5 percent in February 1998 to 31.9 percent today. The increase indicates an additional 400,000 direct share owners and is primarily due to the listing of AMP.
  • Approximately 750,000 Australians have entered the share market for the first time in the last eight months. Since 1995, a total of 2.3 million Australians have invested in the share market for the first time. This represents 17 percent of the Australian adult population.
  • Despite the lack of change in the overall level of share ownership, there has been some change to its composition. Ownership of shares only by indirect means declined from 12 per cent to 8 per cent between February and October 1998. Instead, people have exchanged these investments for direct investments or added direct investments to their existing indirect investments.
  • Only one quarter of Australians who currently own direct shares have been in the market for ten years or more, while the majority of direct share owners, 57 percent, joined the market in the period 1995 to 1998.
  • On average, direct shareowners have 3 companies in their portfolio. Currently around 4 in 10 have direct shares in only one company, due to entering the market through a major public listing, such as AMP.
  • The average value of each share parcel bought and sold in the last 12 months is $6,600.

Key demographic trends include:

  • Overall male and female participation rates have not changed significantly since February 1998 - currently 46 percent and 35 percent respectively.
  • Share ownership is higher among those aged 45-54 years compared to other age groups, with more than half of this group owning shares either directly or indirectly. However, there are significant numbers of shareholders in all age groups, including more than 1 million among those aged 25-34 years, 35-44 years, 45-54 years and 55 years and over.
  • Although there have been no market changes between February and October 1998, there are quite significant levels of share ownership at relatively low levels of household income. Around half of households with incomes between $30,000 and $50,000 per annum have some form of share ownership and around one in four households with an annual income of less than $30,000 are direct or indirect share owners.

The impact of AMP:

  • Around 1.6 million Australians (11 per cent of the adult Australian population) received shares as part of the AMP listing.
  • Approximately half of these (730,000) entered the share market for the first time via this listing, leading to a small but noticeable impact upon the level of direct share ownership in Australia - that is, a 3 percent increase.
  • The AMP listing had a far greater impact than the TAB float. This share float attracted investment by 4 percent of the Australian population (around half a million people) but only 24,000 of these were first-time investors.