Turmoil turns investors off shares

Share investing has lost some of its gloss

Falling share prices have scared Britons from the stock market, and interest in equities is likely to remain subdued, a report has warned.

Levels of activity in private client accounts fell by 9.5% in the April to June quarter, according to stockbroker and fund manager association Apcims.

Angela Knight: Disorder is scaring investors

And, with stock markets remaining nervous, Britons are not imminently expected to channel savings back into the market.

"Private investors have followed the old City adage 'sell in May and go away'," said Angela Knight, chief executive at Apcims, whose members handle business on behalf of 12 million private investors.

"Until sense and order return to the markets, we will not expect private investors to be buying again in significant numbers."

Online trading

Dealing volumes in the quarter were 40,000-50,000 trades per day, compared with the 60,000 seen in the year and half before.

And volumes have fallen further since, dipping early last month towards the 35,000 deals a day mark, the report, undertaken with research firm ComPeer, showed.

The downturn has affected both traditional and internet brokers, with levels of online trading "faltering".

And even when Britons did trade, they were more likely to sell than buy, the document said.

Searching for clues

The findings of the report will be closely watched by economists keen to deduce exactly how much the recent stock market slide has affected consumer confidence.

And it will raise further concerns over City prosperity, following reports of a series of job cuts among financiers.

Also on Thursday, Barclays revealed a 4% drop in operating profits, with dealing profits at its Barclays Capital investment bank arm falling by 10%.