Banque de France Bulletin no. 237: Article 8 Non-residents held fewer shares in French CAC 40 companies at end-2020

By Guette-Khiter Christophe

Thematic: Economy and international financing

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At end-2020, non-residents held EUR 667 billion worth of shares in French CAC 40 companies, out of a total market capitalisation of EUR 1,672 billion, which corresponds to a holding rate of 39.9%, down for the seventh consecutive year. Changes in stock prices accounted for most of this decline.

In 2020, non-residents purchased EUR 1.7 billion worth of CAC 40 shares, while residents were net buyers for a much higher amount, to the tune of EUR 10.5 billion.

Non-resident investors were mainly from the euro area (43.9%), whose share is increasing, and from the United States (32.4%).

% non-resident ownership of French CAC 40 companies

1 Non-resident holdings of French shares continued to decline in 2020

Simultaneous fall in the non-resident holding rate of CAC 40 and non-CAC 40 listed shares

At 31 December 2020, the share of non-residents in the ownership of the 37 resident companies in the CAC 40 stood at 39.9%, down 0.7 percentage point on the previous year (see Chart 1), continuing the decline that began in 2014.

Non-resident holdings in the CAC 40 can be broken down between portfolio investments (89.6%) and individual direct investments (10.4%) (see Chart 2). For the latter, which reflect a long-term commitment, this is the highest point over the last twenty years.

In 2020, non-resident ownership of French non-CAC listed companies fell by 1.4 percentage point. For all French listed shares, the non-resident ownership rate fell by 0.8 percentage point to 36.1% (see Chart 3 below).

30% of French companies in the CAC 40 are majority-owned by non-residents

At 31 December 2020, 11 of the 37 French CAC 40 companies were majority-owned by non-residents and 9 were less than 30 -owned by non-residents. The number of French companies with international investors holding more than 50% of their capital has increased since 2017 (see Table 1 below).

The dispersion of non-resident ownership rates of French CAC 40 companies, which had been rising since 2017, is narrowing slightly. In 2020, for the first quarter of companies with the lowest foreign ownership, the ownership rate increased by 1.2 percentage point, while it decreased by 1.6 percentage point for the last quarter of companies with the highest foreign ownership (see Chart 4).

Non-resident ownership declines in the financial sector, but increases in technology-related activities

In 2020, the “Technology and telecoms” sector posted a 5.1 percentage point increase in its share of nonresident ownership. In contrast, the share of non-resident ownership in the “Financial corporations” sector dropped by 3.5 percentage points. The “Oil, gas, materials and industries” sector remained the sector with the highest non-resident ownership rate (see Chart 5).

Non-resident holdings of French listed shares are low relative to other European countries

At end-2020, non-residents held 36.1% of all French listed shares. This holding rate is lower than that of the other major European countries, which, unlike France, posted an increase between 2008 and 2020 (see Chart 6). In addition, French listed shares accounted for EUR 2,308 billion of market capitalisation, which is higher than in the other major European countries…