OCBC sees surge in young investor trading
OCBC Securities said trading activity among its younger investors has jumped sharply this year, with the brokerage expecting further momentum from upcoming changes that will make Singapore stocks accessible in smaller lots.
The number of active investors aged 30 and under rose more than 20% year over year as of Sept. 30, while the number of trades made by the group increased nearly 60%, according to OCBC Securities. The brokerage defines active young investors as customers who have traded in Singapore or overseas markets at least once in the previous six months.
The increase comes as Singapore equities have performed strongly this year and ahead of changes by the Singapore Exchange, or SGX, to reduce board lot sizes starting Oct. 5.
Under the changes, the board lot for stocks priced above S$10 will fall from 100 shares to 10, while stocks priced above S$100 will move from 100 shares to a single share. The initial rollout will cover 11 stocks priced above S$10.
Changes benefit younger investors
OCBC Securities will also permanently eliminate minimum commissions for all online SGX trades from Oct. 5. More than 95% of its young investors trade exclusively online, the brokerage said.
The changes could particularly benefit younger investors, who tend to invest smaller amounts and build portfolios gradually rather than waiting to accumulate larger sums, according to OCBC Securities.
Seven of the 10 Singapore-listed stocks most traded by the brokerage's young investors this year were priced below S$10, while the remaining three were local banks.
“This year’s market performance has clearly caught young investors’ attention,” said Wilson He, managing director of OCBC Securities. He said smaller board lots and the removal of minimum commissions would give investors greater flexibility to trade smaller amounts.
The changes could also make it easier for investors to sell odd-lot holdings, the brokerage said. About a quarter of its clients’ Singapore stock holdings are currently held in odd lots, including shares accumulated through scrip dividend programs.
OCBC Securities said the combination of smaller board lots and lower transaction costs would benefit investors beyond the younger segment as Singapore’s market structure evolves.
