Banque de France Bulletin no. 242: Article 5 Non-residents held more shares in French CAC 40 companies in 2021

By Hodeau Aurélie, Sirello Olivier

Thematic: Economy and international financing

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For the first time in eight years, non residents increased their share of ownership in French CAC 40 companies. At end 2021, they owned 40.5% of the total market capitalisation, i.e. EUR 866 billion out of EUR 2,137 billion. This rise can be attributed to net share purchases, at a record high since 2014, amounting to EUR 13.3 billion, predominantly in companies operating in the oil, gas and consumer services sectors. It was also attributable to the scope effects of the study, associated with the relocation of certain custodians in France.

However, residents were net sellers of French CAC 40 shares to the tune of EUR 6.9 billion.

International investors are primarily located in the euro area (44.2%), whose share rose particularly in Luxembourg (15.8%) and the United States (35.1%).

1 Non‑residents invested more in French shares in 2021

Non‑resident investors preferred listed French shares

At end‑2021, non‑residents owned 40.5% of the share capital of the 35 resident companies listed in the CAC 40, up 1 percentage point on the previous year (see Chart 1). This makes 2021 the first year to record an increase in non‑resident equity ownership since 2013.

Non‑resident investments primarily consisted of portfolio investments (90.8%). Direct investments made up 9.2% of the total, down by slightly more than 1 percentage point (-1.1) from 2020, when they hit a peak since 2008 at 10.3% (see Chart 2).

Non‑resident ownership of French non‑CAC 40 listed companies rose by 0.8 percentage point between 2020 and 2021, continuing the recovery underway since 2018. For all French shares listed on Euronext, the non‑resident ownership rate rose by 1.1 percentage point to 37.6% (see Chart 3 below).

One‑third of French CAC 40 companies are majority‑owned by non‑residents

At 31 December 2021, 12 out of the 35 French CAC 40 companies were majority‑owned by non‑residents. Among the 23 others, 7 were less than 30%‑owned by non‑residents and 16 between 30% and 50% 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).

The dispersion of non‑resident ownership rates of French CAC 40 companies increased in 2021 (see Chart 4). Non‑resident ownership rates increased in all quartiles of the distribution. In particular, companies with the highest non‑resident ownership rate (last quartile) saw a 6.1 percentage point gain. Companies in the second quartile posted a more modest increase (1.9 percentage points).

Non‑residents predominantly invested in consumer services and commodities sectors

In 2021, the “consumer services and utilities” sector recorded the highest increase in the non‑resident ownership rate, i.e. 4.1 percentage points compared to 2020. This sector was followed closely by “oil, gas, basic materials and industrials” with a 3.5 percentage point rise. Conversely, the non‑resident ownership of the “health care and consumer goods” sector fell slightly by 0.8 percentage point (see Chart 5).

Proportionally, non‑residents invested more in other European countries

At end‑2021, non‑residents held 37.6% of all French listed shares, representing a slight increase of 1.1 percentage points compared to 2020. …