Paris (AFP)

Can the arrival of La Française des Jeux give the public a taste for shares? The popularity of this company argues for, but the lack of knowledge and skepticism of individuals towards the markets remain obstacles.

Anxious to revive the popular shareholding, the government has planned specific measures for the subscription of shares that will begin on November 7 before starting trading on the Paris Stock Exchange on November 21.

For the first time since 2005 and the IPO of EDF, a free share will be granted for ten shares purchased by small savers. In addition, if these shares are kept for 18 months, a discount of 2% on the price of the security will be applied.

France is one of the only countries, with Belgium, to offer this type of device, whereas in the United Kingdom, for example, individuals can only buy securities during the first exchanges, in direct competition with professionals.

"La Française des Jeux is a good grip" to bring individuals back to the stock market, "because its business is easy to understand and predictable enough," which is "important to reinitiate the link with savers," said the report. AFP Stéphane Boujnah, CEO and Chairman of the Board of Euronext, a private company that manages several stock exchanges, including Paris.

A diagnosis shared by Jean-Pierre Pinatton, chairman of the supervisory board of broker Oddo BHF, for whom "in a period when fixed income revenues do not pay anything, the individual has more than ever his place on the stock market", in particular with "a company, easy to understand, secure and regular income".

- Cult of the Livret A -

The financial crises or the bad memories left by the privatizations of France Telecom, (become Orange) and EDF, explain a good part of the mistrust. The prices of EDF, listed on the stock market in November 2005 at 32 euros and France Telecom, introduced in October 1997 at 27.75 euros, are still well below these levels.

"Individuals on the stock market were some 9 million in the 2000s. But between the crash and volatility, people are gone" and there remains more than a little over 3 million, assesses Charles-Henri d ' Auvigny, president of the Federation of Individual Investors and Clubs (F2iC) which has 120,000 members.

The cult of French for livret A and life insurance contracts also played.

"The French have a savings rate higher than the European average (14.1% against 12.5%)", but these savings are mainly placed on savings books and life insurance, or remain on the market. Bank account; they are therefore "weakly, if at all remunerated", analyzes Florence Barjou, head of diversified management at Lyxor AM.

For Boujnah, head of the Amsterdam stock exchanges, Oslo, Brussels, Lisbon, Dublin and Paris, however, three elements have changed: "the punitive taxation has evolved, interest rates have collapsed - the one who wants a bit of yield is therefore obliged to look at the shares - and with the FdJ, we have an emblematic operation capable of capturing the interest of individuals ".

- Know the rules -

But if the Française des Jeux provides an engine, can it restart the machine alone?

To sustainably revive the flame, "we need other operations likely to capture the interest of the French," and we must "break the natural reflexes that lead to advise bonds or life insurance," says Mr. Boujnah.

"Do not encourage investors to invest on a single value," also considers the president of the F2iC, recalling a prerequisite adage on the stock market: do not put all his eggs in one basket.

All the experts put forward a need for pedagogy.

"If the stock market has bad press, it's because the French have knowledge of the markets that is not very advanced," notes Ms. Barjou.

There is a lack of education, at school, at the level of distribution networks and public authorities, says Pinatton.

"When markets go up, it's euphoria, people come back to stocks," he says, "when the indices go down, they're disappointed, they run away and feel like the dice are stuck, but the problem is they do not know the rules, simply because no one has explained them. "

© 2019 AFP