TD Waterhouse unveils most traded shares of 2009
Angus Rigby, Chief Executive Officer, TD Waterhouse comments: "The well-known 'dog stocks' theory states that a selection of the weakest performers one year (the dogs) will go on to outperform as they are re-rated the following year. So for which sectors did this theory ring true in 2009?
Insurers brace themselves for more winter blues
"Given the exceptionally snowy weather we have been experiencing over the last few days, it is perhaps quite apt that our spotlight should first fall on the insurance sector. Last year there was no sign of insurance sector stocks in our annual top ten, however this year it is interesting to note Aviva sitting in 7th place and Legal & General in 10th place on both of our tables, although in reality buys were very slightly ahead of sells.
"The impact of regulatory issues on the share price of insurance companies, as new challenges hit the industry and pressured insurers to streamline operations; can in some way explain why they held our customers' interest this year. However, the weather has also played its part and for Aviva the first surge in trading can perhaps be linked back to the winter blues of 2008, when the insurer reported a 500% increase in water damage claims following pipes and tanks bursting in lofts due to plummeting temperatures. This is a risk that threatens to repeat itself this Christmas as the UK prepares for another freezing weekend and the South-East in particular reporting the worst snow it has seen for 18 years.
Customers change tack on BP
"The one trend that has remained more or less constant throughout this year is buying rather than selling, with top ten buys 17% ahead of sells during 2009. Moreover, last year's top sells are now this year's top buys.
"BP in particular has moved from being the 8th most popular sell in 2008 to become the 8th most popular buy in 2009. This reversal in trading strategy corresponds to BP's generally increasing share price over the past 12 to 15 months. The most notable exceptions to this upward trend appeared in September 2008 and in March 2009.
"Back in the freshly post-Lehman phase of September 2008, BP's share price took a deep plunge thanks in part to Russia's anti-trust watchdog issuing a hefty fine on TNK-BP for abusing its dominant position on the market and setting ‘monopolistically high' prices. After some steady rising, the oil miner's share price took another severe tumble in March this year following a $275 million fine for a tax law breach. It will be interesting to see if BP's rising share price leads to a sell off in 2010, or whether retail investors hold on to their shares in anticipation of a continued rise in commodity prices next year, lifting oil and mining sector shares further still.
Banks steal the show
"Unsurprisingly banks continue to dominate retail investor interest. Last year the most traded bank stocks were Royal Bank of Scotland (RBS), Barclays, Lloyds TSB Group and HBOS. However, following the merger of Lloyds and HBOS on the 19th January this year, the newly formed Lloyds Banking Group steals the show as the most popular buy and sell for 2009.
"Customer trades in these three banks alone account for two-thirds (66%) of this years overall top ten buys and sells, highlighting how much of a turbulent year it has been for the banking sector as whole. While fluctuating banking stocks have certainly been a risky investment this year, they will have still proved profitable to those investors who timed their trades well. However, there is a general feeling of ill will towards banks in general, which will not have been helped by this week's news that the Office of Fair Trading (OFT) is not going to pursue it's test case into the fairness of overdraft charges (but vows to continue the fight through other avenues). As we enter a new decade the banks have their work cut out to improve customer, if not investor, sentiment next year."