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Even though share prices have risen steeply in recent years, private German investors remain wary of equities. The objective of people who invest in stocks is generally to accumulate assets over the long term. A far-reaching study released today shows how private shareholders can be approached in a more effective manner and what lawmakers can do to promote an equity-investing culture in Germany.
This study was prepared for the third time by Professor Bernhard Pellens of Ruhr University in Bochum in co-operation with Deutsche Post DHL, Deutsches Aktieninstitut and DIRK - Deutscher Investor Relations Verband. 'One of the declared goals of our Strategy 2015 is for the group to be the investment of choice,' says Larry Rosen, CFO of Deutsche Post DHL. 'To achieve this objective, we have not only continuously improved our profitability but have also constantly focused on the interests of our more than 400,000 shareholders.' The focal points of the survey, which was also conducted in 2004 and 2008, are the general information-collecting habits of private shareholders, the exercise of their voting rights and their attitudes about dividends and rising stock prices. 'The study of the retail investors' general preferences and attitudes will also help us to better live up to our commitment and better meet the expectations of our own shareholders in the future,' said Mr Rosen.
'As past studies have shown, the latest findings indicate that the media serve as the central information source for the investment decisions made by private shareholders. To be able to win them over, a company must practice good media relations,' says Professor Pellens, the author of the study. The media are also obligated to report accurately and understandably about a company's business position. 'Since the last study was conducted, the importance of annual and quarterly reports has risen slightly again in spite of the expanding extent and complexity of the figures being presented,' says Professor Pellens. 'This trend is certainly being facilitated by the constantly expanding electronic availability of company information.'
Deutsches Aktieninstitut believes that political leaders must now take action. 'To enable private investors to better understand the business reports issued by companies and to use them as a source of information for their investment decisions, political leaders must finally play a more active role in creating a better base of fundamental knowledge about finance,' says Christine Bortenlänger, chief executive of Deutsches Aktieninstitut. 'A fundamental base of knowledge is the best form of consumer protection - not paternalism and bans. The aim is to create economically knowledgeable and responsible investors who consciously invest in equities and other securities after reviewing the necessary information.'
The study found that private investors are more interested in increasing their assets than in having a say in a company's strategy when they invest in stocks. 'More than 80% of surveyed shareholders say that long-range asset accumulation is an important or very important investment goal,' says Kay Bommer, managing director of DIRK. As a result, private investors take a long-term view and serve as a stabilising force in the shareholder structure. 'But they rarely exercise their voting rights at annual general meetings,' adds Mr Bommer.
Deutsche Post DHL
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