RPT-Retail trading boom sparks 500%-plus rally in small German brokers

(Repeats Feb. 18 story with no changes)

* Lang & Schwarz, Baader Bank, Tradegate up 500-1,200% from

* Retail-oriented platforms see big volumes boost

* Hype over Tesla, Bitcoin, GameStop lures amateur traders

* ‘Retail clients have time to trade during lockdowns’

* Investors cautious about longer-term trends

By Danilo Masoni

MILAN, Feb 18 (Reuters) – The retail trading boom has fired
up the stocks of some small German brokers, including one run by
around 50 people, which reported a 10-fold rise in annual profit
after an almost similar jump in its share price in less than a

From being among the smallest players by market
capitalisation in its field to boasting a 1,200% rise in its
shares, Lang & Schwarz is the latest example on how
lockdown boredom and high savings rates in Europe have triggered
a surge in stock investing by non-professionals.

The hype around the record breaking run in bitcoin and Wall
Street darlings like Tesla, or the Reddit-fuelled surge
in GameStop and cannabis stocks in 2021, has given
another impulse to the boom driving meteoric gains in Lang &
Schwarz, as well as Tradegate and Baader Bank
since March 2020.

Germany, the most populous country in Europe and where
financial literacy is high, has emerged as a hot spot for fund
managers investing in the sector’s stock.

“We haven’t seen such a boom since the end of the 1990s,”
said Roger Peeters and Christoph Frank, executive partners at
pfp Advisory in Frankfurt, which holds a stake in Lang &

“In Germany there are a number of companies from platforms
to stockbrokers and focused banks which could gain a lot of
profit from this development. The crucial question is: how
sustainable is the development?,” they added.

After initially surging on Thursday Lang & Schwarz shares
saw some profit taking. The stock however remained 7% below the
record close marked earlier this month. Shares in Baader Bank, a
market maker and brokerage, and Tradegate, a retail bank and
trading firm, also eased after rising around 850% and 500%
respectively from March lows.

“A big part of the success of these companies is tied to an
explosion of volumes in 2020/2021 due to the pandemic and the
large liquidity on markets,” said Michele Pedroni, senior
portfolio manager at DECALIA in Geneva.

Baader Bank saw accounts on its trading platform more double
in 2020 and is upbeat on this year, while Tradegate more than
doubled its dividend after pre-tax profit jumped 568% last year.

Online broker Sino, whose shares have soared nearly
six-fold from March, has recorded a further improvement of
trading activity in January after orders processed in the three
months to December rose 177%.

Lang & Schwarz said late on Wednesday that in January it
managed 6 million trades, a record monthly number that was also
higher than the volume it handled in all of 2019.

Pedroni said that beyond the pandemic’s short-term volume
boost, some of these platforms have earned new clients and that
should represent a benefit over a longer time frame.

Meanwhile, Lang & Schwarz, cautioned that there were no
assurances this trend would continue throughout 2021.

But the ongoing buzz prompted Credit Suisse to upgrade
Deutsche Boerse to “outperform” citing among other
reasons the activity in Tradegate, in which the stock market
operator has a stake.

“Increased retail trading participation for Tradegate even
brings a growth story to (German share trading platform) Xetra”.

(Reporting by Danilo Masoni; editing by Thyagaraju Adinarayan
and David Evans)


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