Germany leads online share dealing explosion

LONDON (CNN) -- German investors lead the field in European online share dealing, a report has revealed. More than 1.5 million Germans now trade shares on the Internet.

Germany has 54 percent of the European market, an increase of 107 percent in the country since December 1999 when investment bankers J. P. Morgan started their survey - the first to collate comprehensive data of major online brokerage markets.

Runners up are France and Sweden each with 11 percent of the market. But the fastest expanding online business is taking place in Italy - which is growing at 275 percent.

The UK represents only seven percent of the European online broking market despite accounting for one-third of European shareholders, the report finds.

The company's e-finance strategist Huw van Steenis said: "We believe the archaic and expensive clearing and settlement acts as a drag anchor on the development of the UK market."

He forecasted that Italy would overtake the UK next year.

'Super league' breaking away

More than 2.9 million Europeans are now conducting broking online, a market that has doubled in the six months from 1.4 million in December 1999.

"Equity investing is breaking out like an epidemic across Europe. Customers are voting with their feet to invest online," van Steenis said.

He said tracing the conversion of shareholders from traditional methods of investing to online trading is complex because it involves a "double migration problem." That is to say from paper certificates to nominee accounts and then by telephone to the Internet.

There are also more than 120 online brokers operating in Europe but there is a "super league" breaking away from the second division, van Steemis says.

The top five -- Consors, comdirect, DAB, Brokerage 24 and Bipop-Entrium -- represent 57 percent of the market.

"Consumers will demand 'Martini Finance' - access any time, any place, anywhere -- from any access device," says van Steemis.

J. P. Morgan's forecast for pan-European online customers by 2003 is as follows:

Germany: 5.2 million

France: 2.5 million

Italy: 2.1 million

U.K.: 1.8 million

Sweden: 1.8 million

Spain: 1.6 million

Netherlands: 1.4 million

Switzerland: 0.7 million

Total 17.1 million

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