CORRECTED FOCUS: Individual investors flock to online trading, push up stock prices.
Individual investors are stepping up stock trading via the Internet, helping to support the recent significant recovery in Japanese share prices.
An improved economic environment in Japan and modest brokerage commissions for online trading have been cited as major factors drawing individual investors to the stock market.
''The biggest factors contributing to the rise in the number of individual stock investors are improved economic fundamentals in Japan and larger trading via the Internet,'' said Yutaka Miura, deputy head of the equity information division at Shinko Securities Co.
The growing popularity of online trading is reflected by the fast growth in the number of online trading accounts.
According to the Japan Securities Dealers Association, the number of trading accounts established at 55 brokerages for online trading increased by 706,339 over a six-month period, rising to 4,955,151 at the end of March.
The association says the value of online stock transactions by member brokerage houses on behalf of their clients represented a record 22.5 percent of the value of their total stock trading in March this year. A large proportion of Internet trading is conducted by individuals.
Membership in the Japan Association for Individual Investors has also been increasing by more than 100 people each month, said Hisao Oku, secretary general of the Tokyo-based nonprofit organization. At present 15,000 individuals belong to the association.
''The spread of the Internet and online trading seems to have encouraged more people to start investing in stocks for the first time. We have noticed a diversification in the type of jobs of our members,'' Oku said.
Volume on the Tokyo Stock Exchange's First Section exceeded 1 billion shares for a record 47 trading sessions in a row through Friday. The previous stretch was 37 sessions between May and July last year.
Yosuke Shimizu, a market analyst at Monex Inc., a major online brokerage house, said individuals have accelerated online trading due to reduced brokerage fees.
''They are repeating buy and sell orders in order to reap some quick profits, contributing to the increase in the overall trading volume,'' he said.
Individual investors accounted for 40 percent of the total trading value on the Tokyo, Nagoya and Osaka bourses in the second week of April, the first move above the key line since the fourth week of December 2002.
The active trading by individuals is helping to push up stock prices in Japan.
The benchmark Nikkei stock index has risen by about 40 percent over the past year. On April 26, the index hit a 32-month closing high of 12,163.89.
In line with increasing individual investors, seminars on stock trading, mostly sponsored by brokerage houses, are becoming increasingly popular.
In late April, the TSE inaugurated the TSE Academy, a school to provide seminars on stock trading. The academy has been flooded with applications for stock courses, TSE officials said.
Both an introductory course, targeting beginners in stock trading, and a course for more thoroughly providing the basics of stock investment received applications about six times the enrollment limit of 150 people.
''We were squealing in delight because we had not expected so many applicants,'' said Kazue Matsuura, a TSE Academy manager.
The popularity of stock seminars has become robust because individual investors need to acquire more skills and knowledge about online trading since it requires them to collect data and information on their own in making investment decisions, analysts say.
''Individuals are looking for professional advice,'' said Monex's Shimizu.
Next Tuesday, ewoman Inc., the operator of an Internet forum mainly targeting working women, will launch asset management seminars.
In a survey conducted on ewoman's community site last year, 63% of its members said they want to start stock trading.
Motoshi Ishiyama, a manager at the company's business development office, said, ''I think the growing interest (in stock trading) reflects enthusiasm among many working women to look for ways to earn investment profit using their money.''
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|Publication:||Japan Weekly Monitor|
|Date:||May 10, 2004|
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