Retail investors snap up shares in bumper week for trading platforms amid Brexit volatility

Jake Cordell
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It's been choppy out there. But that hasn't stopped private investors piling in
It's been choppy out there. But that hasn't stopped private investors piling in (Source: Getty)

Last week's referendum sparked waves of volatility on the financial markets, triggering interventions from the Bank of England and causing trading to be suspended on a handful of the UK's biggest companies.

Banking shares were butchered. Housebuilders were demolished. But, the FTSE 100 now stands at a 10-month high after it became clear some of the big international players will benefit from a weaker pound and looser monetary policy - something which traditionally buoys equities - is here to stay.

In all this market mayhem, you would think it was only seasoned navigators of the markets, veterans who had been here before and had the stomach for more than a healthy dose of turbulence.

However, trading platforms have reported activity from retail investors has spiked over the last week, with the stocks that took a hammering after the vote proving the most popular among lay traders.

Hargreaves Lansdown also said private investors placed four times as many shares as in an average week, and shifted their focus towards more international and dividend-paying investments.

Moreover, trading hasn't been one-way with people selling up, taking the cash and running. Far from it, in fact. The Share Centre said 60 per cent of trades placed were 'buys' not 'sells'. At Hargreaves Lasndown it was 70 per cent.

Michelle McGrade, chief investment officer at TD Direct Investing said: “The vote to leave the EU has certainly got the markets moving – even with all of the ambiguity about what the vote will mean, traders and investors have been buying into the volatility.

"After an uncertain few months where most have been unwilling to take any risks, and sitting on the sidelines, the result has pushed investors into action."

The share price crashes in Lloyds Banking Group, Barclays, Taylor Wimpey, EasyJet and Royal Bank of Scotland (RBS) sent them to the top of the charts for the most popular buys for private investors in the first week of trading after the UK decided to leave the EU. Banking stocks were the most frequently traded TD Direct, Hargreaves Lansdown and AJ Bell, and ten times as many private investors bought shares in Lloyds and Barclays than sold them over the last week according TD Direct.

Russ Mould, investment director at AJ Bell added: "Retail investors are taking advantage of buying opportunities following dramatic post Brexit vote falls in share prices. Market volatility driven by sentiment rather than company fundamentals is normally short-term and many investors seem to be focusing on what really drives share price valuations over the long term."

Despite the FTSE 100 posting one of its strongest weeks since 2011, experts warned volatility was likely to be around for some time for the political situation in flux, monetary policy, trading relationships and economic growth all up in the air.

Brexit Britain: What you need to know

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