Private investors are back in business

After three years away from the Danish stock market, private investors have returned, tempted by rising share prices.

Danes are in love with stocks again. Almost one in every four share at the Copenhagen Stock Exchange is now traded from a home computer through direct order routing on the bourse. Nordnet, an internet brokerage serving only private investors, turned out to be Denmark´s third busiest stock trader in 2004.

Investors renewed their interest in the stock exchange after seeing shareholders profit by a total of DKK 111 billion in 2004. The gains have helped many people to overcome a bitter experience of entering the booming stock market just before prices slumped in 2000-2001.

But more private investors are needed, according to Hans-Ole Jochumsen, CEO of the Copenhagen Stock Exchange. They are essential for the bourse to develop and attract new companies.

"We have felt the private investors returning to the market," Jochumsen said. "And because of the direct order routing, where people can in practice present prices directly to the exchange, private investors can affect price development more than ever before."

But Danish private investors have never pulled their weight on the stock exchange. Rather than gambling in flighty stocks, Danes traditionally harbor their money in bonds and bank accounts, unlike Swedes, Britons and Americans.

"It´s important in the long run to attract more private investors," Jochumsen said. "It´s essential for us to develop the market for domestic stocks without an international appeal."

Jochumsen added that the return of private investors showed that there was room for more listings on the stock exchange in 2005.

"Denmark is in a situation where we need to demonstrate that it´s not difficult to be listed, even if you´re not a big company with an enormous market value," he said. "I think people underestimate the investor kulture. Private investors today are a stronger factor on the stock exchange than ever before."

A recent Vilstrup opinion poll showed that 33 percent of Danes considered investing in stocks in 2005, compared with 26 percent in 2004.

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