The 2017 budget law that approved the creation of a new tax-exempted individual savings account (in Italian, piani individuali di risparmio) has started to payoff for the national economy.
The individual savings account (hereafter PIR) provided by Italian asset managers for investments with a maturity period of at least 5 years, are exempted from the 26% tax on capital gains and inheritance (see article here), thus making them more attractive for investors.
Driving the change in the structure of the securities market, are the requirements for these new financial products to hold at least 70% in equities of significant Italian businesses, and at least another 21% of assets invested in Italian SMEs shares.
As a result, already counting with 33 new listings on the Borsa Italiana, the Italian mid-caps equity index has seen a 39% increase over the past 12 months, with 18 pp. above the equities market average (see article here). Considering that most Italian businesses are family-owned and, therefore, not present on capital markets, the PIR builds the bridge between the significant investment power of Italian citizens (as they are considered ‘great savers’ – see report here) and SME financing needs.
The investment ability per saver is estimated at 30,000€ per annum and potentially constitutes ‘a big new pool of investment capital’,[1] which is also expected to trigger a diversification of the asset management market with a ‘the creation of at least 20 new asset managers’ (see article here).
[1] The Economist, ‘Italy’s new savings accounts fuel a boom in stockmarket listings’ 23 November 2017.