Banque de France Bulletin no. 231: Article 4 Non-residents holdings of French CAC 40 shares at end-2019 and early 2020

By Guette-Khiter Christophe

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At the end of 2019, non-residents held EUR 686 billion worth of shares in French CAC 40 companies, or a total of EUR 1,684 billion. This represents 40.8% of the total holdings and is down 7 percentage points on its 2013 peak. Non-resident holders are mainly from the euro area (43.1%) and the United States (33.7%).

In 2019, non-residents purchased EUR 500 million worth of shares in French CAC 40 companies, while residents were net sellers to the tune of EUR 1.9 billion.

During the first quarter of 2020, these flows reversed fairly significantly, with non-residents becoming net sellers and residents net buyers, in the amount of EUR 15 billion and EUR 20.7 billion respectively.

1 Non-resident ownership of French shares continued to decline in 2019

Non-resident holdings of shares listed on the CAC 40 decreased

As at 31 December 2019, non-resident investors held 40.8% of the total value of shares in the 36 French companies listed in the CAC 40. The figure was down 0.9 percentage points compared with the previous year (see Chart 1). This figure has been declining since 2014.

Non-resident holdings of CAC 40 shares can be broken down into portfolio investments, which accounted for 91.1%, and direct investments, which accounted for 8.9%. These proportions are identical to those of the previous year (see Chart 2).

Measured as a share of all French listed stocks, non-resident ownership fell by 0.7 percentage point in 2019 (compared with –0.9% in the CAC 40), to stand at 37% (see Chart 3). The overall decline was somewhat offset by the increase in the CAC 40’s share of total market capitalisation in 2019, whose ownership rate by non-residents is higher.

Only a quarter of French CAC 40 companies are more than 50%-owned by non-residents

At 31 December 2019, out of the 36 French companies of the CAC 40, only 9 were more than 50%-owned by non-residents. Eight of them were less than 30% owned, a figure that has increased in recent years (see Table 1).

The dispersion of non-resident ownership rates for French CAC 40 companies increased in 2019. For the first quartile of the least foreign-owned enterprises, the ownership rate decreased by 5.1 percentage points to 20.8%, while it increased by 0.5 percentage point for the last quartile of the most foreign-owned enterprises to 57.1% (see Chart 4).

Non-resident CAC 40 holdings fell in most sectors of Activity

Only the “oil, gas and basic materials and industries” sector, which tends to attract highest levels of foreign investment, posted a rise in non-resident ownership in 2019. Conversely, the share of non-resident ownership declined in 2019 for all other sectors of activity. The “technologies and telecoms” sector, which receives the least investment from non-residents, experienced the strongest decline (see Chart 5).

Non-resident ownership of French listed shares is low compared with other European countries

The rate of non-resident ownership of all listed shares in France stood at 37% at the end of 2019. This rate is lower than that of other major European countries, which, unlike France, showed an increase between 2008 and 2019 (see Chart 6)…