UK: More small shareholders but they own less.

UK: More small shareholders but they own less. - % OF EQUITIES HELD BY PRIVATE INDIVIDUALS

Last Updated: 31 Aug 2010


Germany 19.4

United Kingdom 20.0

Finland 30.0

Netherlands 35.0

Ireland 50.0

Switzerland 50.0

Source: The GT Guide to World Equity markets 1992

Britain's army of small shareholders, fed on a diet of enticing privatisation share issues, have made little headway in breaking the grip of the big institutions on the stock market. Stuart Allen and Selina O'Connor record in the latest GT Guide to World Equity Markets, that the number of private investors has jumped threefold since 1983 to 11 million, but the proportion of equities actually owned by private individuals has fallen from around 28% to 20%. In Europe, these proportions do not make favourable comparisons for Britain. Only Germany, with some 19.4% of shares held by individuals, has a lower figure (there are no figures readily available for France or Italy). It is in smaller countries, where the savings habit is deeply ingrained, that the proportion of smaller shareholders is high. In Ireland and Switzerland, some 50% of the quoted shares are reckoned to be owned or traded by private individuals. Trying to arrest the declining proportion of equities held by British private investors could prove a herculean task. For a start, there will be precious few privatisations on the scale of British Telecom or British Gas to attract the Sids by their droves. The remaining tranches of utility companies in the public sector will be keenly priced to avoid any easy profits for Sid and consequent political flak. And British Rail or British Coal do not have the same attraction as investments. Furthermore, disenchanted with Japanese stocks and worried about the German economy, the City has re-discovered its passion for British equities, safe now with five years of Tory government. It will be an interesting test for Michael Heseltine, the new President of the Board of Trade, if he can maintain the Government's proud boast to be the friend of the small investor despite these odds.

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