Page last updated at 13:08 GMT, Wednesday, 27 January 2010

Personal share ownership falls to just 10% of UK shares

Calculator and Financial Times
Personal share ownership has been on a downward trend since 1963

Individuals in the UK own just 10% of the shares traded on the London Stock Exchange, down from 13% in 2006 and far lower than the 54% they owned in 1963.

Foreign investors, of all types, are the biggest group and now own 42% of shares on the London stock market.

The latest figures, as of the end of 2008, were compiled by the Office for National Statistics (ONS).

The data reveals the huge changes in the pattern of share ownership in the UK in past 45 years.

Despite the extension of share ownership being one of the great mantras of the Conservative governments of the 1980s and 1990s, their policy of privatising nationalised companies has had little long term impact on the overall position of private shareholders.

"The proportion of shares held by individuals has been on a downward trend since 1963," the ONS said.

"Although the trend was flat at around 20% between 1989 and 1994, by 2004 holdings had decreased to 14%.

"The proportion of holdings has continued to fall and in 2008 stood at 10%," the ONS added.

Foreigners

Back in 1963 foreign investors owned just 7% of UK shares.

After dipping in the 1970s, their share of the UK market rose rapidly in the 1980s and 90s, and has continued rapidly since then.

WHO OWNS UK QUOTED SHARES 2008
Rest of world 42%
Insurance companies 13%
Pension funds 13%
Individuals 10%
Unit trusts 2%
Investment trusts 2%
Others financial institutions 10%
Charities 1%
Private non-financial companies 3%
Public sector 1%
Banks 4%
Source: ONS

Foreign investors became the single biggest category of investor in 1997, by which point their ownership had risen to 28% of share trade on the London stock market.

"The large increase since 1994 partly reflects the growth in international mergers and acquisitions, as well as refinements to the classification of holdings, including the incorporation of securities dealers' data," the ONS explained.

Most of the business of firms on the London stock market is conducted abroad, even if their origin lies in the UK.

BBC business correspondent Nils Blythe said there were few hard facts about this aspect of share ownership.

"Many companies do not publish a geographical breakdown of where they do business," he said.

"But a sensible round number, estimated by an analyst at Morgan Stanley, is that about a third of the turnover of UK quoted companies is generated in the UK and two thirds overseas," he added.

Nationalisation

The government's ownership of UK shares shot up, from the 0.1% as of the end of 2006 to 1% in 2008, because of the nationalisation of the RBS banking group.

Meanwhile bank ownership of UK shares in 2008 was the highest since the ONS records started in 1963.

The proportion of shares on the London stock market owned by insurance firms and pension companies has been in decline since 1993.

Their combined stake in UK shares was 52% then, but by the end of 2008 had dropped to just 26%.

"With the increasing number of alternative investment opportunities throughout the 1990s, fund managers looked to broaden their portfolios to seek higher returns and to spread risk," said the ONS.

"ONS inquiries to pension funds show a trend towards bond investment starting in 1999."



Print Sponsor


RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites


FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC navigation

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific