Private shareholdings halve in 18 months
Article Date: Oct 20 2008
Valuations have plummeted
The value of private shareholdings in the UK stock market fell to £138 billion by the end of September following net selling and declining valuations.
Market movements suggest this figure had dropped to £109 billion by 16 October, according to data from share register administrator Capital Registrars. That is 46 per cent lower than the peak of March 2007, when shares worth £204 billion were in private hands.
Private shareholders now own 9.6 per cent of the UK’s listed companies, down from more than 11 per cent a year ago.
Michael Kempe, operations director at Capital Registrars, says, ‘Private investors have turned their backs on the stock market. Their share of UK plc is now at its lowest in both value terms and as a proportion of the stock market since the privatisation boom of the 1980s.’
The data revealed that private investors sold a net £5.1 billion of their holdings in financial stocks since the end of September 2006, while healthcare, seen as a defensive sector, has attracted a net £2.2 billion of investment.
Kempe adds, ‘Private investors correctly anticipated the underperformance of the banks, but their move out of the sector was driven more by rising interest rates, which traditionally indicates a conventional economic slowdown, rather than foreseeing the momentous events which have driven the banking system to the brink.’
