More than half of shares in listed UK firms owned by foreign investors for the first time
UK CAPITAL markets are more global than ever, it was revealed yesterday, as official statistics showed that for the first time more than half of shares in British companies are now owned outside the UK.
In just a few years, the balance of power in Britain’s boardrooms has shifted dramatically, with 53.2 per cent of the UK’s quoted shares now under beneficial ownership outside of the country, mirroring the global business interests common to many FTSE 100 firms.
The proportion of foreign owners has surged, up from only 30.7 per cent in 1998. And the value of UK shares held by foreigners has risen even more rapidly, more than doubling from £460.9bn to £935.1bn.
Nick Baird, the chief executive for UK Trade & Investment said: “These figures show that the UK remains a world-leading business destination as well as the growing confidence and trust that foreign investors have in UK businesses.”
While North America and Europe are still home to the largest overseas investors, with 25.7 and 13.7 per cent of the overall market respectively, shareholders in other markets are becoming a larger fixture.
As recently as 2010, the proportion of UK shares held in Africa rounded to zero, shooting up to 3.8 per cent last year, as the continent’s budding financial services sector expands.
A Confederation of British Industry spokesperson commented: “These figures show that the UK has been successful in attracting foreign investment, which is critical to our economic success.”
Shares owned by the public sector have risen up from next to nothing in 1998, to 2.5 per cent of the market last year. This is attributed to interventions in the Royal Bank of Scotland and Lloyds during the financial crisis. The government held shares worth £42.6bn at the end of last year.
However, other UK investors are now holding a much smaller chunk of the UK’s shares. In the 14 years to 2012, the proportion held by UK insurance companies fell from 21.6 per cent to only 6.2 per cent. Similarly, UK pension funds now only hold 4.7 per cent, in comparison to 21.7 per cent held in 1998.
There has been a long-term decline in the segment of UK shares owned directly by individuals: 50 years ago, single owners made up over 50 per cent of shareholders, but a long-term decline has reduced the proportion to a much lower level. Only 10.7 per cent of the UK’s shares are still held by individual investors.