Reasons may range from lower churn rate to unwillingness to realise losses.

The retail investor is holding his stocks for a longer period on average,from six months in 2007 to 17 months in 2011. There could be several reasons for this, ranging from a lower churning rate to investors being unwilling to realise their losses,said equity analysts.

The increase in average holding period was revealed by Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam on Monday in a reply to a parliamentary question. The data for 2012 is currently being processed by the Central Depository (CDP), Mr Tharman said. The CDP isrequired to maintain
records for six years.

Information for institutional investors is not available as most hold shares in custody or omnibus accounts through financial institutions rather than through direct accounts with CDP. Equity analysts said that the longer holding period by retail investors could be due to the difference in market sentiment and direction during the 2007‐2011 period.

Besides speculative trading, investors were also buying small caps during that period.

Source: AmFraser