Head of SPB Exchange Stock Exchange talks about social investing phenomenon

Discussing new trends in the investment market, Director General of SPB Exchange Roman Goryunov devoted special attention to the phenomenon of social investing. He talked about it at the VTB Capital’s “RUSSIA CALLING!” investment forum. The event was aired by RBC.

Goryunov referred to social trading as “emotional investing”. According to him, investors often “vote with their portfolio for companies that they like, that they believe in”. However, due to the wide spread of social media, retail investors were able to “coordinate their efforts”, and their actions, whether deliberately or not, may have a serious effect on certain securities and on the market as a whole”, noted Goryunov.

He added that the index, calculated by stock exchange analysts based on portfolio structures of various investors, has “impressive” dynamics. This index demonstrates that retail investors are “outplaying” institutional investors, said the head of SPB Exchange.

Socially responsible investing suggests that the decision on whether or not to invest in a business is made based on this business’ contribution to social development (ESG-investing) or moral and ethical standards of the investor (SRI-investing).

Aside from socially responsible investment, there are also the so-called “sin stocks” where investments are made in stocks of companies whose operations are morally questionable but generate good profit (for example, alcohol or tobacco production, arms manufacturing etc.).