Half of UK stocks are owned by foreigners

Click to follow
The Independent Online

More than half of the value of the UK stock market is owned by foreign investors, according to the Office for National Statistics.

At the end of 2012, an estimated 53.2 per cent of the market value of British listed firms belonged to investors from the "rest of the world", up significantly from 43.4 per cent in 2010. At the end of last year, the total value of British stock markets was £1,756.3bn, making the stake of foreigners in UK-floated businesses worth around £935.1bn. The ONS said that in the early 1980s, the share of the stock exchange's value that was owned by foreign investors was just 3.6 per cent.

The amount of the stock market owned by non-British investors has been steadily growing over the past 30 years as global capital markets have liberalised.

In more recent years, the London Stock Exchange has become the preferred listing home for vast mining companies and energy firms. The Swiss-headquartered commodities trader Glencore raised $11bn (£6.9bn) in London's largest-ever initial public offering in May 2011.

"The large increases [in foreign shareholdings] since 1994 partly reflect the growth in international mergers and acquisitions and the ease of overseas residents to invest in UK shares," the ONS said in its report.

Overseas investors in British companies were predominantly based in North America, at 48.3 per cent of the total. Europe accounted for 25.8 per cent of foreign investors while 10.1 per cent were from Asia. Of the overseas investors in UK-listed equities, 34.4 per cent were unit trusts, 18 per cent pension funds and 7.4 per cent banks. Some 11 per cent were classified as "public sector", reflecting the increased clout of overseas sovereign wealth funds.

The proportion of the stock market owned by UK individuals was 10.7 per cent, up slightly from the 10.2 per cent share two years ago. The next most significant share owners by category were unit trusts, insurance companies and pension funds. They held 9.6 per cent, 6.2 per cent and 4.7 per cent shares of the stock market respectively.

Banks held 1.9 per cent of shares by value. The public sector owned 2.5 per cent, reflecting the Government's sizeable stake in Lloyds and Royal Bank of Scotland.