From the Wall Street Journal:
The Nikkei stock rally has increasingly been fueled by retail investors. On Thursday, heavy selling from Japan’s new small investor class appears to have been a major factor behind the sharp drop in share prices, raising questions about the bull market’s sustainability.
Traders reported that the institutional selling amid the 7% plunge in stocks was actually not that busy, despite the record volume, and that hedge funds and individual traders were largely behind the trades. The two highest volume stocks were Mitsubishi Motors Corp. 7211.TO -12.57% and Tokyo Electric Power Co. 9501.TO -13.84%, two stocks considered speculative and off-limits to institutions.
Together the pair traded 1.135 billion shares, or 15% of the entire TOPIX turnover.
“The retail segment can no longer be discounted,” said CLSA equity strategist Nicholas Smith.
After years of relative inactivity, retail investors have become a major influence on the Japanese stock market. Data released Thursday by the Tokyo Stock Exchange showed that for the week ended May 17, individual investors made up 39% of trades by value. That was up from 31% at the end of March and just 20% last October, before the current rally began....MORE
