More students punting shares now

Some are curious, others want to learn and still more just hope to cash in on that quick buck. Indeed, more students are opening share trading accounts nowadays armed with greater financial savvy and Internet know-how, and helped by the variety of investment seminars out there.

Many brokerages BT spoke to observed that their undergraduate clients are more pro-active than most - whether it is in seeking information, transacting or trading over the Internet. 'I think kids are getting smarter nowadays,' said one industry veteran. 'They are exposed to financial products and services and there has been a lot of effort in investment education by banks and broking houses through free seminars which teach these young people how to manage their portfolios.'

Phillip Securities says the number of undergraduates who have opened trading accounts with it has risen 21 per cent over the last two years, and the total number of student clients it has so far is just under 5,000.

Over the last five years, UOB Kay-Hian saw the highest number of account openings in 2000, when 631 undergraduates opened accounts with it. Even though this figure plunged to 186 in 2001 after the bursting of the dotcom bubble, it has steadily risen since to 220 in 2003 and stood at 187 in the first eight months of this year.

And these accounts are getting more active. According to UOB Kay-Hian's data, three-quarters of these accounts in 2003 had at least one transaction compared to 61 per cent in 2000.

At OCBC Securities, the number of trading accounts opened by undergraduates has grown by 40 per cent from 2002 to 2003, with more than 80 per cent of these accounts having DIY (do-it-yourself) trading access via the Internet. Leong Mun Wai, managing director at OCBC Securities, said the data shows these students are more knowledgeable about investing and are IT savvy as well. 'Undergraduates are our future investors and are therefore, an important target group,' said Mr Leong. 'Our iOCBC Internet trading platform has been effective in our efforts to target them.'

Other brokerages are looking at new ways to engage students. Phillip Securities, which advertises in the newspapers and takes part in school recruitment fairs, also sponsors activities held by the school clubs such as the NTU Stock Challenge Game last year which garnered 400 participants.

The brokerage spent almost $30,000 on sponsorship last year, and said it takes into account the earning power of undergraduates when it plans its programmes - one of which is its 'Share Builders Plan' where one can invest $200 every month to build up a portfolio.

'All these are to help them develop the right mentality for trading shares, and we are able to give them another perspective coming from the industry,' said a Phillip Securities spokeswoman.

Still, not all brokerages are equally upbeat about the student market. One local brokerage, for instance, said there has 'not really' been a surge in their undergraduates clients, and it has no specific plans to target students as clients. 'It's a segment we have looked at in the past, such as by doing promotions and roadshows at NUS and NTU but this has been discontinued,' said a source from the brokerage. 'We prefer to target them when they actually start working so they have more money. A lot of undergrads want to get their degrees first before speculating on stocks. We don't want to be responsible if they don't get degrees!' he added.

Students who trade say their stock market activities do not hinder their studies. On the contrary, such activities help them prepare for their careers. Take 23-year-old Shaun Yip from Singapore Management University (SMU) who wants to be a derivative sales trader and reckons that a foundation in equity trading would help him in his job.

Pooling his own savings and money from his family, Mr Yip invested $25,000 in a basket of companies which includes Asiapharm, China Flexible Holdings and Fu Yu. He says he 'constantly changes the basket at the right time' after analysing charts and reading reports. Even though he has made $600 so far, he said his scariest moment was when he was staring at a 20 per cent loss on one of his stocks. Still he said: 'For me, it's not so much earning the money but honing the investment skills. The value is in getting the knowledge to build something greater.'

There are others, however, who trade for the excitement. 'I play shares purely for the fun of it. It's quite fun knowing you have made $3,000 within the past week, and even more fun when you lose $3,000,' 22-year-old Joshua Seow says. The third-year science faculty student at NUS uses his father's account to trade because he is 'too lazy to open my account' and said he is willing to invest up to $30,000 for contra trading. The self-confessed speculator is able to tell you which counters are 'auntie stocks (punter stocks),' how to react when the market is humming and what to do when you 'run out of ideas and just want to play' - read shareinvestor.com.

He has lost $2,500 of his own money, earned $500 for his girlfriend and sustained a $1,000 paper loss for his father, but is taking it all in his stride. 'If you want to get bankrupt, now is the time to do it when you are still a student,' said Mr Seow. 'I want to see if trading is a viable source of income and will give myself three to four years to do it after I graduate.'

Of course, not everybody is like him. For SMU student Tang HJ, 23, his experience in dabbling in penny and IPO stocks has taught him it is not so easy making money through trading - even though he earned $70 from investing $1,200 in an IPO.

'There was this period in April and May when there were a lot of IPOs coming out and my friends and I tried for everything,' said Mr Tang. 'It was all pretty interesting but I think I need more knowledge and at this moment, I don't have the means to maintain this kind of trading.' On why he started in the first place, he said: 'It is the possibility of earning money by not doing anything. Also, it becomes a peer thing when everyone starts talking about it.'

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UNDERGRADUATE Brauns Teo struck when the stock market was hot, and earned $3,000 last year from trading in the shares of newly listed companies.

'At that time, the IPO market was quite hot - so almost anything you bought, you would make money,' said Mr Teo, who started an online trading account with a deposit of $1,000.

But he soon lost a good portion of that money as he had plowed those earnings back into shares while the market cooled.

Stocks of the companies he bought have slid since then and have not climbed back up. 'All I can hope for now is a dividend payout,' Mr Teo said ruefully.

But he took away from that experience a valuable lesson of not relying solely on the vagaries of the stock market. 'Careful research is crucial before investing in any shares.'

Mr Teo, who is studying at Nanyang Technological University, first started dabbling the stock market last year after hearing about his friends who had opened online trading accounts.

And if there is one thing he has learnt so far, it is never to play with 'fear' money. 'Whatever money you invest, you cannot be afraid to lose,' said the 23-year-old.

His schoolmate Joshua Chua's appetite for the money market similarly began when friends around him started trading. 'I had some spare cash and my friend knew about a financial adviser from Philips Securities whom we could talk to.'

One meeting was all it took - Mr Chua went through a thorough risk assessment, opened his account, and began trading on SGX.

What are your goals?

'I think risk assessment is very useful - everyone should go through it before they begin investing their money,' said Mr Chua.

'We got free advice on how to plan for our whole life - marriage, kids, housing, car, illnesses and so on.'

'The important thing to ask is: what are your goals? What are the risks you can take while protecting yourself and your family? And what is the best instrument to use in your investment portfolio? Even if you don't end up trading in the end, knowledge about the market is good general knowledge.'

Mr Chua said his visit to the brokerage enriched his learning experience. Tools such as live quotes, news headlines, forecasts and research, time and sales of shares and stock charts make it 'an excellent place to learn about the market'.

The only thing is research is not free - and as a student, he is not willing to spend the money.

NTU undergrad Jackson Tan said that the best thing to do is to learn the skills to research. His interest in shares began at 18 - but he had to wait till he turned 21 to open an account.

'I was always fascinated by how the market works. There's a certain adrenaline from buying and selling in short periods, capitalising on gains of a few cents in a counter,' said Mr Tan.

At one point, he traded up to 45,000 shares worth $18,000 in a day. 'It was really exciting and a learning experience - but I've learnt to be more cautious now. Being a student, that money means a lot.'

Investing has turned out to also be a bonding experience for him and his father. 'My dad taught me to be wary of depending on market depths and confidence levels when making a decision to buy a counter,' he said. 'Some big players don't park their orders on the market and they can buy or sell in large volumes unexpectedly.'

These three friends said they trade more frequently during the holidays when the school workload is smaller.

'It's hard to juggle final-year projects and investing - watching the market takes up a lot of time.'

They log in to their accounts about twice a week, and do serious investment only during school vacations.

'Shares are something that you have to log in and watch every single day. You cannot buy a counter and leave it there for a few months without looking at it,' said Mr Tan.

And it seems like investing in the equities market is more of a 'guy' thing. 'We don't have any female friends who are interested in the market,' said Mr Teo.

But NUS undergrad 20-year-old Tania Goh is an exception - she plays the market through her parents, as she has yet to turn 21. 'It's more convenient getting them to do it for me,' she said. 'The only problem is I don't have much capital.'

She conceded that 'girls my age are usually not interested'.

'Playing the market is like betting on football or 4D - ultimately, it's gambling. And gambling is just not in a girl's make-up.'

'Girls tend to be be less risk-taking,' she laughed. 'But not me.'

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