Share ownership among individuals sees downward trend

Just one in ten shares listed on the London Stock Exchange were owned by individuals at the end of 2008, new figures have revealed.

In 2006, the proportion was 13 per cent, while in 1964 it stood at 54 per cent.

Foreign investors represent the single biggest group of owners, with 42 per cent of the Stock Market’s share in their hands, data from the Office for National Statistics has shown.

There has been a decline in the shareholdings of insurance companies and pension funds too. In 1993, their total stake in the market was 52 per cent. By the end of 2008, it had halved to 26 per cent.

The latest figures confirm a long-term change in the nature of the ownership of shares.

The ONS said: “The proportion of shares held by individuals has been on a downward trend since 1963. Although the trend was flat at around 20 per cent between 1989 and 1994, by 2004 holdings had decreased to 14 per cent. The proportion of holdings has continued to fall and in 2008 stood at 10 per cent.”

This contrasts with the scale of foreign investor ownership. In 1963, that figure was just 7 per cent. But by 1997, overseas investors were the biggest category of purchasers of shares on the Stock Market.

The ONS added: “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.”