“More investor engagement secures better liquidity and order books, leading to lower round trip cost for investors and ultimately leading to lower cost of capital for listed companies,” he said.
The covid-19 crisis led to trading volumes being 42 percent higher in 2020 over 2019. And now it is staying high – with numbers for 1Q 2021 being even higher than those a year earlier.
“But what was also completely new to us was the fact that the global pandemic reinforced the surge in retail trading across the world. The retail trading boom in the US over the last year led on by people working from home, the breakthrough of next-generation retail banking providers offering zero commissions and the trading in stocks like GameStop and AMC, has put the world’s eyes on the higher interest in equity trading by private investors,” says Nikolaj Kosakewitsch.
“In the Nordics, we’ve seen a constant increase in private investor participation over the last 10 to 15 years. This goes particularly for Sweden, but also in Denmark after the launch of the “aktiesparekonto” meant to support the Danish retail investment culture. We should be proud of our high participation and democratic and inclusive approach to the stock market.”
Even so, Nikolaj Kosakewitsch thinks there is more to be done.
“On the private investor side, digitalization is everything. Sustainable inclusive growth will only happen if private investors can be digitally connected to capital markets. We know that the Nordic banks are seeing these trends and are in the process of improving their mobile capabilities to keep up with the growing demand. One reason that Nasdaq Nordics’ growth market First North has been so successful is a relatively high proportion of retail participation. Smaller investors have been able to be part of the growth journey of the companies coming to market. The online retail brokers offering services in the Nordics play a vital role in the financial ecosystem.”
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