Non-resident investors controlled 48.8% of Spanish shares at the end of 2021, 1.1 percentage points less than a year ago. Nonetheless, they remain the leading owner group of Spanish listed companies, according to the BME Research Department’s latest update to a report which it has produced for three decades now. Households are the second major owner group, which own 17.1% of the shares, the same percentage as in the previous year. Together, these two groups own two thirds of Spanish equities, well above the rest of investors.
So far this century, international investors have increased their weight in the Spanish stock market by more than 14.5 percentage points. The greater internationalisation of Spanish companies, especially listed companies, is one of the factors behind this growth. Non-resident investors show a clear preference for listed companies, since according to data from the Financial Accounts at the end 2021 published by the Bank of Spain, non-resident investors own barely 24% of unlisted companies, slightly less than half of the corresponding percentage for listed companies.
In the group of international investors, institutional investors are the preeminent group: investment and pension fund managers, sovereign wealth funds, insurance companies, venture capital or private equity funds and even investment banks and intermediaries that hold portfolios of shares.
According to the report, the strong presence of international investors and the importance of the stock market in efficiently valuing these holdings and providing adequate liquidity should be strong arguments against the Financial Transaction Tax (FTT). "As it is not a tax agreed with the EU, the Spanish stock market and therefore the main Spanish listed companies are being unfairly penalised as an investment alternative compared to other competing companies, whether or not they are based in other European markets ", says the report, coordinated by Domingo García Coto, Head of BME's Research Department.
The share of households in Spanish listed companies remains stable at 17.1%, far from the record high of 33.6% reached in 1999. In recent years it has followed a downward trend, in line with the rest of Europe, where the share of retail investors has traditionally been lower than in Spain. The increase in retail activity seen in the US and, to a lesser extent, in the European markets after the start of the pandemic, did not continue in 2021. This was partly due to profit-taking after the strong stock market recovery.
Among the reasons for the lower direct investment in equities by Spanish households are the inability of successive reforms of European financial and stock markets to attract more investors, the almost total absence of retail tranches in recent IPOs, the growing weight of mutual funds in investors' portfolios, the reduced performance in recent years of sectors popular with retail investors such as banking and telecommunications, and the growing interest of investors in crypto assets.
Non-financial companies, meanwhile, own 20.9% of Spanish listed companies, just one tenth of a percentage point less than a year earlier. Collective Investment Institutions, insurance and other non-bank financial institutions increased their weight to 7%, compared with 6.4% previously, while Public Administrations hold 2.7% (two tenths of a percentage point less) and banks and savings banks 3.5%. This figure represents an increase of eight tenths of a percentage point and is the highest since 2015.
The complete report is available here.