Tech meltdown sees private share trade plunge 37 per cent

The burgeoning private investors market suffered a sudden slowdown in the wake of the meltdown in new technology stocks in March, figures released yesterday show.

The burgeoning private investors market suffered a sudden slowdown in the wake of the meltdown in new technology stocks in March, figures released yesterday show.

The number of share trades by individuals fell by 37 per cent and the amount of money invested in the stock market was down by a third between April and June, compared with the first three months of the year. Amateur investors took fright after seeing their stakes in some new technology stocks implode over night.

The figures, released by APCIMs, the body that represents private client stockbrokers, suggest this downturn is not about to come to an end. "We expect execution-only trades to fall again for the current quarter, although we think internet-only trades should be up," a spokesperson said.

One stockbroker with private clients said: "It feels rather quiet in the office now, as we are doing about 10,000 trades a day. Back in April to November we were doing about 30,000."

He said that many brokers had geared up for the boom in the retail investment market, following a surge in interest since last November, when internet stocks surged and novice investors piled into the market. These brokers are now over-staffed. However, the latest figures show that private investors have not deserted the market completely, with trading volumes still 30 per cent higher than they were last year. The broker said: "We now think November to April was a blip. We anticipate the market will continue to grow, but from the level of before November."

Online trading also fell in the second quarter by nearly 30 per cent but, APCIMS said, the number of active online sharedealing accounts was up from 162,000 to 233,000.