Banque de France Bulletin no. 225: Article 7 Non-resident holdings of French CAC 40 shares at end-2018

By Guette-Khiter Christophe

Thematic: Economy and international financing

Share links

At the end of 2018, non-residents held EUR 557 billion worth of shares in French CAC 40 companies, or 42.2% of a total market capitalisation of EUR 1,319 billion. The rate of non-resident ownership thus declined for a fifth consecutive year, primarily due to a change in the composition of the index.

Non-residents purchased a net total of EUR 5 billion of CAC 40 shares in 2018, whereas resident investors purchased a higher total of EUR 8.5 billion.
Some 44.2% of non-resident investors are based in euro area countries, while 33% are based in the United States.

1 Non-resident ownership of French shares

Decline in non-resident ownership of CAC 40 shares and rise in ownership of non-CAC 40 shares

As at 31 December 2018, non-resident investors had a 42.2% shareholding in the 36 French companies listed in the CAC 40, down 0.9 percentage point on the previous year (see Chart 1) and continuing the decline observed since 2013.

Non-resident holdings of CAC 40 shares can be broken down into portfolio investments, which accounted for 90.6%, and direct investments, which accounted for 9.4% (see Chart 2).

Measured across all French listed stocks, non-resident ownership edged up slightly by 0.4 percentage points in 2018 to 37.8% (see Chart 2). This was the cumulative result of two effects:

the sharp fall in the share of the market capitalisation of non-CAC 40 companies helped to push up the rate of non-resident ownership;
in parallel, non-resident investors increased their overall stake in French non-CAC 40 companies slightly to 27.6% (see Chart 3).

Fewer than 30% of French CAC 40 companies are more than 50%-owned by non-residents

As at 31 December 2018, of the 36 French companies included in the CAC 40 index, only ten were majority owned by non-resident investors, down from 14 in 2015 which was the last year when the CAC 40 comprised 36 French companies (see Table 1 and Chart 4).

The dispersion of non-resident ownership rates for French CAC 40 companies increased in 2018. For the first quartile of companies (i.e. the least foreign-owned) non-resident ownership fell by 5 percentage points, whereas for the last quartile (i.e. the most foreign owned) it rose by 2 percentage points.

Non-resident ownership has declined in the majority of sectors

“Financial corporations” was the only sector to see a rise in the proportion of shares held by non-residents in 2018, following the decline caused by structural effects in 2017. As a result, the sector once again ranks first in terms of non-resident ownership. In contrast, in all other sectors, non-resident shareholdings declined in 2018. “Technology and telecommunications” saw the biggest drop, making it the sector with the lowest rate of non-resident ownership (see Chart 6).

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

French listed shares have the highest market capitalisation in Europe, and exceeded the total value of UK listed shares in 2018. Expressed as a ratio of gross domestic product (GDP), to appreciate its size relative to…