(from Pat Jordan)
A recent study of share ownership has completely demolished the idea of people's capitalism sometimes expounded by 'progressive' sections of the Tory and Libewal parties. Jack Revell and John Moyle in their "The Owners of quoted ordinary shares, A Survey for 1963" (Chapman & Hall, 21/-), produce a different picture. They were faced with two major difficulties in making this survey, First, was the enormity of the task, In 1963, there were 3,€04 companies quoted on the London Stock Exchange whose share registers contained between 14 and 15 million entries. The authors made a sample of the registers of 176 companies, including the 39 largest by market value which account for a total of 37% of the market value of all companies, A total of 140,000 entries - one per cent — were examined, Secondly, senething like one third of all securities by value were listed under nominees rather than the names of actual owners, The number of registrations under nominee companies and corporate trustees is estimated to be 450,000; and there are a considerable number of registrations under the names of joint personal holders, A sample was taken covering 7,800 nominee and corporate trustee holdings were further investigated. It turned out that 28% of all nominee. eempany and corporate holdings by value covered individuals and family settlements, 21% investment trusts, 154 pension funds, 12.5% overseas residents and 7% non-financial companies, The results of this subsample were then applied to the larger sample and to an earlier survey for 1957. The resulting figures were: Category of owner 1957 % 1963 % Persons, executors, trustees 65.8 54.0 Financial institutions 17.9 25.1 Non-financial companies 207 . Sel Overseas residents 4.4 7.0 Other 9.2 8,8 With the double sample it is clear that there is a wide margin to be allowed for error, Even so, these figures reveal that there is a strong move away from individual ownership towards institutienal ownership. By now the share of individual ownership is probably down to 50%, with institutional owership up to 30%. At the present rate it will only be a few years before institutional ownership exceeds that ef individual. However there is maxe to this than that: the share registers of the country's 39 largest companies contain more than 20,000 entries; but the largest 20 holdings in these companies account for between 5%, and 25% of each company's market value. The growth of institutional investment in the l&t three years is shown by the fact that their purchases of ordinary shares have exceeded the net amount of new ordinary capital issued by between £210 million and £250 million, The institutions - insurance companies, pension funds, investment and unit trusts - represent the vast number of small savers, But the control of these organisations is effectively in the hands of @ very small number of people. /contd. opposite...