Translated material
Protests
Ordinary Russians do not want to invest money in the domestic economy
Neither the rapid growth of the Russian stock market in recent years, nor the impressive returns of mutual funds, nor the public IPO of Rosneft, nor the deposit insurance system have been able to instill in Russians a love for financial instruments. They still don't like banks and investment companies too much. According to a study published yesterday by the Public Opinion Foundation, less than 2% of citizens have recently taken part in stock transactions. According to financiers, this is due to the fact that our society is just about to make the transition from consumption to accumulation. Another important factor is the continued mistrust of financial institutions, lack of financial culture and lack of awareness in the investment field.According to the results of the study, 43% of our compatriots do not have any financial experience, that is, they did not even exchange currency and did not have a bank account. The situation on the stock market is no less depressing: only 1.9% of Russians made transactions with shares. Moreover, the vast majority (63.3%) would not buy shares in any case.
The lack of financial opportunities for investment is likely due to the growth of consumer lending. According to the study, 26.4% of respondents used loans. “The boom in consumer lending indicates that the population is becoming more solvent and is beginning to acquire basic material goods,” says Stanislav Kleshchev, an analyst at the investment department of Vneshtorgbank-24. “However, precisely because of this, citizens have no opportunity to invest. All funds are spent on consumption. As incomes continue to rise, this need will be satisfied, and then people will start investing.”
“It is necessary for the general well-being of Russians to increase,” agrees Yuri Sedykh, a dealer at the Russian Development Bank. -- It's hard to think about diversifying your savings when you don't have any. We still have to evolve from the “period of consumption” to the “period of savings,” and then the difference between the number of Russians who have used consumer lending and the number of people making transactions in financial markets will decrease significantly.”
However, expert analyst of the National League of Managers Anton Kuzin is inclined to believe that consumer lending and the investment market are not related to each other. “All citizens know what a TV is, and if before a person could not afford to buy it, now, with the help of a consumer loan, he can,” states Mr. Kuzin. “He can also afford to invest some money in the stock market, but he doesn’t know what it is.” However, the specialist continues, the point is not that people are not sufficiently informed about the existence and methods of functioning of all these financial instruments. The main problem is that people do not trust them enough and are not psychologically prepared for them. “Until a person sees that his friends, neighbors, and relatives are effectively using this, he will not be able to fully believe in the feasibility of these operations,” the expert argues. “Over time, the word of mouth effect should work, and then things will go well.”
According to the study, if the surveyed citizens had a large amount of money that did not need to be spent on everyday needs, 32.4% would put it in Sberbank, 6.7% would invest “extra money” in securities, and 2.1% would become shareholders of collective investments.
According to Mr. Kuzin, this is a somewhat overestimated estimate. “According to our data, less than 1% of citizens are involved in transactions with mutual funds. This process is very slow and evolutionary, and the point is not that people lack funds. In order to invest in mutual funds, it is not at all necessary to have a large sum, it is enough to have 100 rubles,” the specialist assures.
“This sociological study confirms that the main reason for the low activity of citizens is the lack of financial culture, not to mention the culture of investment,” says Valery Zinchenko, a representative of the Alfa Capital management company. -- In the USA, for example, 48% of households are involved in so-called mutual funds (analogues of our mutual investment funds). Almost every American or European has some kind of financial plan, money is constantly allocated for retirement or savings purposes, rather than sitting still.”
In addition, the specialist notes, in Russia there is no such class of specialists as financial intermediaries who advise citizens on financial issues. “In the West, people do not understand such matters on their own,” Mr. Zinchenko emphasizes.
According to the results of the study, the propensity for investment activity increases depending on the level of education: only every fifth of those surveyed with incomplete secondary education is ready to purchase shares, while among certified respondents there are 43%. In addition, the propensity to buy stocks decreases with age. In particular, among respondents under the age of 30, 42.7% are ready to buy shares, among those aged 31-40 years - 42.4%, at the age of 41-55 years - 32.5%, over 55 years - - only 15.1%.
According to Mr. Zinchenko, young people are more active in the field of brokerage, since there are greater opportunities for remote access, and convenient computer brokerage programs are becoming widespread.
At the same time, as a rule, men who are over 35 years old are interested in mutual funds. Young people are less interested in this instrument due to the fact that “they don’t care about the future yet.” According to Mr. Zinchenko, this trend will change, young investors will definitely come to the market, as the relevance of mutual funds is growing. “In our opinion, 2007 will be the year of mutual funds,” notes the specialist. Meanwhile, from January 1, 2007, investment benefits for securities are expected to be abolished, which, according to the head of the Federal Financial Markets Service Oleg Vyugin, could harm inexperienced investors. So one of the unfavorable consequences could be selling securities before the New Year (to avoid taxes). At the same time, according to Deputy Head of the Federal Financial Markets Service Sergei Kharlamov, the regulator intends to propose its own amendments to the Tax Code, which will facilitate taxation of private investors. The amendments provide for the introduction of a graduated level of tax on income from investing in securities. In particular, if investments are made for more than five years, then the income tax rate will be reduced from 13 to 9%, if for more than seven years, it will be 5%. Investments for more than ten years will be completely tax-free.
===================================================== =======
The report “Social Resources of Mass Investment” was prepared by the Public Opinion Foundation based on the results of a rating of investment sentiments of Russian citizens. The survey was conducted in 1,930 settlements in 68 federal subjects. The sample size is 34 thousand respondents, the statistical error for Russia as a whole is no more than 1%. The study was conducted by FOM as part of a joint project with the MICEX Stock Exchange and the Agency for Creative Communications "Salvador D".