Compared with countries such as the United States and Britain, the German people rarely buy shares of listed companies in family finance. Even though the DAX index of the Frankfurt stock market in Germany has continued to rise in recent years and the German economy has recovered significantly, the newly opened accounts in the securities market are mainly institutional investors and foreign investors. According to relevant statistics, the number of German investors accounts for only 7.1% of the total population of the country, and this ratio is 23% in the UK and 25% in the US. Why don’t Germans love stocks?
”The Germans have always been sensible and calm, and the stock market dream of getting rich overnight is hard to impress the German people.” Wang Yan, who works at the Berlin Stock Exchange, first gave us an explanation from the national character. Ms. Orsevsky, a freelance journalist who has been engaged in German economic reporting for a long time, said: “Whether it is a German citizen or an entrepreneur, it is a primary consideration when investing in risk avoidance. It is difficult to make investment decisions without purchasing 80%. The same is true for stocks.”
According to Orsevsky, “the stock market is not the main choice for German family finance. The perfect insurance system gives the Germans a stable living environment. Education, pensions, etc. do not require a lot of money. The German people do not put stocks. Investment is the main source of income.” For example, she said that in the United States, statutory pensions account for 45% of the income of an ordinary retire’s family, corporate pensions are 13%, and private investment benefits are 42%. In Germany, this proportion is 85% for statutory pensions, 5% for corporate pensions, and 10% for private investment. From the above data, it can be clearly seen that private investment is important to Americans’ old age, while Germans are completely focused on statutory pension insurance.
In addition, the existing social welfare security system in Germany makes most of the monthly income of the German people must be used to pay various social insurance premiums. The proportion of German employees who pay various monthly insurance expenses in monthly income is medical insurance. 14%, 2% in nursing insurance, 19% in pension insurance, and 6% in unemployment insurance. Therefore, there are not many “living money” and “hot money” that ordinary workers can use to invest in the stock market. For a long time, the so-called investment methods of the German people are quite conservative. Most of the funds are invested in life insurance, traditional savings or purchase of housing with less risk and stable income.
“The main channel for German corporate finance is banks. Direct financing through listing on the stock market is not the main choice for German corporate finance,” said Bien Stir, CEO of a German investment consulting firm. Therefore, the number of shares issued by German companies and banks is small, and the people will be “no stocks to speculate”. According to statistics, the amount of German bank loans is equivalent to 100% of its GDP, twice that of the United States; and the German stock market has a market value less than 40% of GDP, which is about 130% of the US. Far away.
Germany implements the “all-round banking system”, and banks can operate both deposit and loan business and securities business. This makes it easier for companies to raise funds directly in the securities market than from bank loans. At the same time, banks also want to directly control the company through loans, and do not encourage companies to participate in the securities market. Except for a few giant enterprises, SMEs are actually the backbone of the German economy, accounting for 99% of the total number of enterprises in the country, and employment accounts for more than 70% of the total employed population. However, these companies are mainly family-owned enterprises. Most of these companies refuse to go public in the market, considering the transparency of listings and the threat of acquisition.
The German government and the stock exchange have also tried to attract ordinary people to participate in stock investment. From 1996 to 2000, under the impetus of the federal government’s privatization reform, Germany set off an unprecedented stock market fever. From 1996 to 2000, the share price of Deutsche Telekom, known as “the national stock”, rose more than seven times, reaching a level equivalent to 104.9 euros per share. However, the good times have not been long. Since 2000, global high-tech stocks have experienced a large-scale decline. In less than two years, Deutsche Telekom’s share price has dropped from a high level to 8.14 euros per share. During this period, the Frankfurt DAX index fell from 8136 points. Until 2188. The enthusiasm for the whole stock market ended in disastrous defeat. Until now, many small investors who had been desperate for the first time have not recovered.
The skyrocketing stock market has caused many Germans to evade stock trading. The Germans generally believe that investing in the stock market is the business of fund companies, banks or other financial institutions. At present, individual investors also indirectly “invest in the stock market” by purchasing bonds, funds, insurance, etc. In the case of domestic investors’ investment is not active, German securities institutions vigorously promote internationalization strategies. For example, the Frankfurt stock market implements the integrated operation of spot, futures and settlement, attracting most institutional investors from all over the world.