The evidence (Real World†11.11) shows that more than half of the shares listed on the London Stock Exchange are owned by investors who are based overseas. Why might overseas investors want to buy shares listed in London?

Data from Real world 11.11

Sharing things out

At the end of 2018, the proportion of shares of UK listed businesses held by various investors was as shown in Figure†11.11.

Figure 11.11.

A striking feature of the ownership of UK shares is the extent of overseas ownership. At the end of 2018, this accounted for 55 per cent of the total; in 1963 it was 7 per cent and in 1998, still only 31 per cent. This overseas investors’ ownership of shares in UK businesses is broadly mirrored by the extent to which UK investors own shares of businesses based elsewhere in the world. It reflects the high level of the globalisation of business and financial markets.

Another striking feature is the extent to which large financial institutions now dominate the ownership of UK listed shares. In 1963, individuals owned 58 per cent of those UK shares owned by UK investors. By the end of 2018, it was only 30 per cent, although it had been even lower in recent past years.