During the coronavirus crisis, Belgians traded up to five times more BEL 20 shares than in the period before the crisis. As well, many more shares were bought than sold. Young and infrequent investors were much more active during the crisis period. These are the findings of the study conducted by the Financial Services and Markets Authority (FSMA) based on an analysis of data from the transaction reports it receives.
The coronavirus crisis has led to significant stock market fluctuations. In the light of these fluctuations, the FSMA conducted a quantitative study of the behaviour of Belgian private individual investors. The authors of the study examined whether individual investors bought and sold more or fewer BEL20 shares during the crisis. They also analysed whether the behaviour of investors differed by age group and investment frequency.
For the purposes of the study, the FSMA used the transaction reports it receives in accordance with the European Regulation on markets in financial instruments. The reports cover all transactions carried out via Belgian banks or investment firms, all transactions carried out on a Belgian regulated market, and all transactions that involve a financial instrument for which the FSMA is the competent authority, thus including shares listed on Euronext Brussels.
The study is based on a sample of more than 3 million transactions, for a total amount traded of more than 10 billion euros, carried out by nearly 323,000 individual natural persons. The main conclusions of the study are summed up in below.
- The purchase and sale of shares increased significantly during the crisis period: in the period between 24 February and 30 April 2020, up to five times more shares were traded than in the previous period.
- More shares were purchased than sold: during the crisis period, individual investors bought up to 634 million euros’ worth of BEL20 shares more than they sold.
- Young investors (between 18 and 35 years of age) were much more active during the crisis period: in the third week of February, young investors bought more than 2 million euros’ worth in all. In the last week of March, that amount rose to 21 million euros.
- Infrequent investors (maximum five transactions in the two years before the crisis period) bought many more BEL20 shares during this period: in the week before the crisis, they had bought only 3 million euros’ worth. In the second week of March, that figure climbed to 30 million euros.