Nervous Germans losing interest in stock market

9th August 2006, Comments 0 comments

9 August 2006, FRANKFURT - The number of German shareholders has dropped to its lowest level in seven years as investors pull out of the volatile stock market amid fears of a new profit tax, a report said Wednesday. Some 9.9 million Germans - 15.3 per cent of the population - owned stocks or shares in investment funds at the end of June, a drop of 8 per cent from the beginning of the year and the lowest number since 1999 when there were 8.2 million shareholders, according to the German Institute of Shares

9 August 2006

FRANKFURT - The number of German shareholders has dropped to its lowest level in seven years as investors pull out of the volatile stock market amid fears of a new profit tax, a report said Wednesday.

Some 9.9 million Germans - 15.3 per cent of the population - owned stocks or shares in investment funds at the end of June, a drop of 8 per cent from the beginning of the year and the lowest number since 1999 when there were 8.2 million shareholders, according to the German Institute of Shares (DAI).

The institute blamed the decline on several factors, including profit taking at the beginning of the year and a sell-off after share prices plummeted in the late spring.

Fears of a new tax on profits from share trading was also cited as a reason that scared off the notoriously risk-shy Germans from investing more in stock markets.

"The lawmakers have it in their power to reduce the declining attraction of stocks as a form of investment," said DAI financial expert Franz-Josef Leven.

At present in Germany share profits are only taxed if there is less that one year between buying and selling. But the government is talking about a new across-the-board tax on capital gains from 2008.

DPA

Subject: German news

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