The curious retail investor retreat from surging bank stocks
Demographic shifts may partly explain widespread selling of bank stocks by mum and dad investors — which has driven retail ownership of three of the big four to its lowest levels.
Retail shareholders, traditionally the most loyal supporters of the big banks, have been selling their stocks. And it is something of a mystery given the strength of bank share prices.
According to bank investor relations teams who closely monitor their shareholder bases, two main theories explain the selling: the relative attractiveness of bank dividend yields have declined with rising interest rates. And an ageing population means more long term bank investors are selling as they move into drawdown of their superannuation. Or die.
“It’s difficult to quantify but we think that demographic force is quite significant and so the challenge is to manage our capital so we are not the bank they are looking to sell into retirement,” one investor relations head told Capital Brief on background.
Another drew attention to the relative yield story for investors as interest rates have risen to more historic long term levels or “higher for longer”.
