(BFM Stock Exchange) – A 2024 study identified by the letter Vernimmen noted that the IPOs could be an important lever to encourage private investors to be interested in the financial markets, and to forge their financial culture.

It is often deplored that “the French are zero in finance”. Nearly a third of French people consider their knowledge average or weak on financial issues. Among the notions the least well mastered there are the mechanisms of inflation, in particular its effects on the value of their savings, according to an Ifop study carried out for Trade Republic, unveiled in December 2024.

However, 60% of those questioned say they show an interest in the implementation of a system (issue, financial education program, tutorial, etc.) allowing them to strengthen their financial culture and thus better manage their money, according to this same study.

However, the development of a financial culture in a country is essential to its inhabitants in order to make judicious financial decisions in difficult economic contexts, recalls the OECD/INFE which carries out an international study on the level of financial culture every three years.

This ignorance for financial mechanisms is also reflected in the placements favored by French households. The booklet A is at the top of the investments held by French households, quoted by 71%of those questioned, when the equity savings plan (PEA) arrives in fourth place (12%) in front of the secrecy account (9%). In the United States, 40% to 50% of American households have actions in their assets, according to data from Survey of Consumer Finance cited by the Vernimmen letter. Which is all logical given the difference in the retirement systems of the two countries.

It happened near you

However, the IPOs could help private investors develop their financial culture, note the authors of the Vernimmen letter, citing a 2024 study on the influence of the IPOs on household investment behavior.

In a study entitled Local ipos and household stock market participationthree academics, Feng Jiang, Michelle Lowry and Yiming Qian noticed that households were more likely to be more interested in the IPOs of companies near their home.

The study in question has listed all of the IPOs, over a period from 1984 to 2017 and crossed these data with those of the Panel Study of Dynamics (PSID), which collects information on income, wealth, expenditure of American households.

The field of this study also introduces an additional criterion: households must be part of the sample for at least two consecutive years in order to measure the evolution of their income and their wealth.

And the results show that an increase in the number of IPOs was followed by a significant increase in the rate of shares by households living near the company. And among households that already held shares, their detention rate increased by almost 1.5%.

Media effervescence

The study authors advance two elements of explanation. The first concerns media effervescence around the operation, which feeds the interest of investors for the stock market.

The most emblematic example of this last decade in France is indeed that of the IPT -to -law entry, renamed from FDJ United. The IPF IPT in 2019 was a popular success, attracting half a million individuals.

“It is beyond all our expectations. This is proof that the bet of popular shareholding is a winning bet,” said Bruno Le Maire during a hearing in front of the senators almost a week after the start of the company’s privatization operation.

The government had placed intense hopes on this PROVATISM OF FDJ to bring the French back to the Stock Exchange, to which they are rather chilly and while the level of savings is very high in France. The FDJ and its main shareholder, the State, had not injured the means and had even granted advantageous conditions to encourage individuals to participate in this privatization.

“We observed a significant return of private investors on the occasion of this introduction,” said Stéphane Boujnah, Euronext boss, manager of the Paris Stock Exchange. “In the end, for the FDJ, the share allocated to individuals was 45%, against 20 to 25% in general,” added Camille Leca, responsible for rating activities for France at Euronext.

The authors also cited a previous university study of 2011, conducted by DA, Engelberg and Gao who had shown that Google research on introduced companies were leaping by more than 40 % the week of the introduction.

“As a significant event, the IPO can help increase conversations on the financial markets and thus, to increase the stock market participation rate,” argue Feng Jiang, Michelle Lowry and Yiming Qian.

An effect in hunting another

The IPOs help to increase the richness of the founders and the first investors of the company, recall the authors of the study. This dynamic is part of the richness effect.

However, this study validates the hypothesis of the attention of attention, but does not confirm this the rich effect. “The canal of wealth has little influence, which is consistent with the fact that local IPOs do not generate wealth shocks for most households,” argue the authors of the study.

“First, we find no evidence that the relationship is stronger among households whose assets or income has increased more after the IPO,” said study authors. Second, we note that the results are not affected by the exclusion of people who are most likely directly linked to the company IPO, that is to say who work in the same sector of activity, “they detail.

The IPOs therefore have a positive effect for the financial markets, summarizes the study. They place the scholarship and the equity markets at the discussion center and encourage households to invest part of their savings in these markets.