Private investors in Britain have tentatively started buying shares again after fleeing the stock market last autumn when the eurozone crisis was hammering confidence.
Small investors bought a net £221 million of shares in the three months to February, a significant change on the previous quarter when they were net sellers of £695 million.
Capita Registrars, which monitors private share transactions, said that retail shareholders were showing “tentative optimism, but this was no headlong rush into equities”.
The improving sentiment comes as the FTSE 100, which has climbed by almost 20 per cent from its low point in October, is within a whisker of pushing through the 6,000 mark for the first time since last summer.
The stop-gap rescue of Greece and the European Central Bank’s €1 trillion money creation schemes have eased worries about a catastrophic new downturn and so have improved investor sentiment, despite patchy signals about the underlying economy.
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Some private investors, fed up with rock-bottom savings rates, have started to risk more capital in shares, where the average yield on FTSE 100 stocks is now 3.5 per cent.
Private investors banked dividends of £8.04 billion last year, Capita said, still below the record £8.41 billion of 2008, but were in line to collect income of £8.55 billion this year as companies raised their payouts.
Private investors have had mixed success in their timing over the past nine months. Some did well last August, piling into shares after the market dived by almost 1,000 points on the US credit rating downgrade and growing eurozone jitters. Net purchases of shares hit a record £1.3 billion in the three months to August. However, they were wrongfooted in the following quarter, baling out when they should have sat tight.