Over half of UK shares are foreign owned

The United Kingdom is among the world's most attractive destinations for foreign investment, new figures revealing more than half the country's shares are owned by overseas investors suggest.

Latest Office for National Statistics (ONS) data shows 53.2 per cent of Britain's £1.8 trillion stock market is in the hands of international investors. This is up from 43.4 per cent in 2010. Two decades ago just under a fifth of the UK stock market was foreign owned, highlighting just how far the country has come in terms of attracting foreign direct investment.

A slew of international mergers and acquisitions and the relaxation of ownership rules in recent years are thought to behind the trend.

"There have continued to be increases in recent years, with holdings now at a record 53.2 per cent. The large increases since 1994 partly reflect the growth in international mergers and acquisitions, and the ease of overseas residents to invest in UK shares," the ONS said in a release accompanying the figures.

Nick Baird, the chief executive for UK Trade & Investment said: “These figures show that the UK remains a world-leading business destination as well as the growing confidence and trust that foreign investors have in UK businesses.”

North American investors hold the largest foreign-owned stock of British shares at 48.3 per cent of the £935.1 billion total. "North American investors increasingly invest directly in the ordinary shares of UK companies listed on the London Stock Exchange," the ONS said.

Europeans accounted for 25.8 per cent of foreign investors while 10.1 per cent were from Asian countries.

UK individuals owned an estimated 10.7 per cent of shares by value at the end of 2012, picking up slightly from the record low in 2010 and halting the downward trend seen in recent years. Unit trusts held an estimated 9.6 per cent by value, continuing the strong growth seen in recent years. Public sector holdings were up due to UK government intervention in Lloyds and Royal Bank of Scotland.

TMF Group helps firms from around the world to invest in the UK. Our local experts can facilitate overseas expansion, taking care of the administrative hassle associated with such moves.

 
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