The outlook of German self-directed investors on the market and the recovery of share prices is positive despite the current market turmoil.
Over 50% of German self-directed investors expect the markets to recover this year or by the end of next year, according to a latest trend survey by the German Derivatives Association (Deutscher Derivate Verband, or DDV). However, about 40% of the respondents believe that the foreseeable economic crisis will last until the end of 2022 or beyond.
The latest DDV market volume report also shows that market size decreased to €68 billion in March, resulting in the lowest outstanding volume since 2005. The number of newly-issued products on the Stuttgart and Frankfurt stock exchanges increased by 74.7% from February to March (investment certificates by 55%; leverage certificates by 78%). Trading activity on the exchanges achieved record highs, increasing by over 50% from the previous month to €8.5 billion, due to the volatile markets. About 80% of the traded volume involved leverage products (€6.2 billion), most of them knock-out warrants.
“A clear trend is not discernible in May,” said Lars Brandau (pictured), DDV’s managing director. “But the extent of the economic consequences of the coronavirus and the duration of the recovery depend crucially on whether a second wave of the pandemic actually comes, how strong it could be and how long it takes to develop a vaccine.
“There are around 1.5 million structured retail products currently listed on the German market," said Brandau. "The certificate industry has always been extremely innovative - there are always and for every market phase suitable products on offer. This applies to investors with medium to long-term investment horizons as well as to the self-directed investors in the leveraged product segment."
DDV’s May online survey was conducted with 5,464 self-directed investors in Germany. It was carried out via several financial portals including Finanzen.net, finanztreff.de, Guidants, Onvista and wallstreet:online.