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Don’t panic at Germany’s largest securities depository

AndHardly anyone else has an insight into private investor behavior like anyone else: Heiko Beck, CEO of German Securities Service Bank (DWP-Bank), Germany’s largest securities depository bank with 5.5 million securities accounts. About 1,200 banks, savings banks and Volksbanks are affiliated with it – three quarters of all institutions. In an interview with FAZ, Beck praised German savers: “The recent stock market swings are making themselves felt in the behavior of private investors, but they are reacting very calmly. There is no sign of panic. “

The savings plans would continue, many private investors would remain invested. “We continue to see more stock purchases than sales, even though new savings and commercial transaction deals have recently declined slightly,” says Beck. According to him, DWP Bank, which is controlled by savings banks and Volksbanken, recorded a 10 percent increase in turnover in the first quarter. This has calmed down since April, but that’s not unusual. The second and third trimesters were getting quieter each year, which Beck attributes to the numerous public holidays and vacations.

“Germans are no longer muffled on shares”

“Measured by what happened, German investors are reacting very calmly,” he reiterated his praise. Indeed, with high inflation, the turnaround in interest rates, the war in Ukraine and fears of a recession, many things have happened that have ruined the appetite for shares of many investors. But Beck sees no alternatives to stocks for stock savers, even in this challenging environment. Interest rates would remain relatively low and inflation high.

“The Germans are no longer muffled about stocks,” Beck says with satisfaction. The development of the last few years demonstrates this very clearly. Young people in particular were more and more enthusiastic about the actions. He justifies the fact that private investors have remained calm in the price correction phases with their greater experience: “They can better evaluate the value of stable companies. It was different twenty years ago at the time of the Neue Markt ”. While the Wirecard deal caused considerable losses for some investors, there were no deviations from the overall stock market thereafter, he adds.

It also recognizes the interest in shares in DWP Bank’s new product, the Individual Stock Savings Plan. Here, investors can save a certain amount each month, which is invested in installments in a single security. “The response to this product is encouraging. Our offer to manage dividend reinvestment was also well received, ”reports Beck.

The most popular stocks for the savings plan (at the end of May) were Allianz and BASF, two high dividend stocks. Surprisingly, Apple’s share follows in third place. Two established German stocks follow, Telekom and Mercedes-Benz, but Amazon, one of the leading US tech stocks, is already in sixth place. With the interest in equities, the willingness of German private investors to invest in foreign equities has also increased.

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