Tuesday, 28 February 2012

UK share ownership

There are some very interesting stats out from the ONS today (hat-tip Duncan @ the TUC). It's been a couple of years since the ONS last did their share ownership report, and they appear to have tweaked the methodology. The headline stats for the two largest blocks of UK institutions - pension funds and insurers - are truly surprising:
At the end of 2010, insurance companies held 8.6 per cent and pension funds held 5.1 per cent by value. These are the lowest percentages since the share ownership survey began in 1963.
Yowser. In contrast UK individuals own 11.5%.

The amount held by overseas investors is now at 41.2%, with 56% of that held by North American investor, 28% by European investors, and 11% by Asian investors. In other words, North American investors own significantly more than UK pension funds and insurers combined.

This, to state the obvious, has implications for UK corporate governance. For example, are the attitudes of North American investors different to those of domestic institutions on issues such as exec pay? As I've blogged before, you can already see the impact of US investors in the voting results on certain resolutions at UK companies, but will we start to see a larger influence on other, more central, governance issues in the future.

It also poses a bit of a problem for the FRC in its implementation of the Stewardship Code, since up tp 4 out of 10 shares are held by investors who are unlikely to be FSA registered, and thus not required to even produced a Code statement.

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