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Share ownership: for the many, not the few?

13 Jan 2020 / Insight

By Keith Hiscock

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By Hardman & Co in collaboration with Argus Vickers

The Office for National Statistics (ONS) is due to publish its most up-to-date survey on share ownership in mid-January, which identifies the beneficial owners and decision- makers of the stock market. Hardman & Co has worked together with the share analysis service, Argus Vickers, to jointly produce its own survey, which anticipates the conclusions of the ONS survey but goes into much greater detail. Our work does not use a sample of 200 quoted companies as the ONS historically has, but rather includes every UK quoted company. The ONS samples share registers every two years; our study uses six-monthly data points. Our survey also extends to shareholders on NEX; the ONS does not.

Investors from the rest of the world (i.e. ex-UK) continue to dominate share registers for Main Market-listed stocks on the London Stock Exchange but are less critical to AIM and NEX.

Retail investors continue to grow their ownership of quoted companies and are far more influential to price formation than many advisors and company managements understand.

In the post-Woodford (maybe we should denote it as BW and PW?) environment, liquidity has become critical to professional investors. Companies with low liquidity risk are being forgotten about – they need to engage with the widest investor audience. Just focusing on institutions is no longer going to cut it. Ignoring retail is not only unfair on these investors, but it neglects a key generator of liquidity. Such a path may prove ultimately fatal for the public life of a company.

This paper outlines a number of routes to improve investor engagement, diversify share registers and grow liquidity.

 

How can FTSE and AIM companies engage with a wider audience?

Hardman and Co’s CEO Keith Hiscock caught up with DirectorsTalk for an exclusive interview to talk through the report: ‘Share ownership: for the many, not the few’.