UK Stock Market Value Up In 2010

The total value of all UK ordinary shares quoted on the London Stock Exchange increased by £619.7bn to £1777.5bn, or 53.4%. The indicators have been rising since the 1980s but since 1995 they have risen more sharply reflecting global events and it can be seen, for example, in the FTSE 100 index.

Individuals hold 11.5% of the shares, banks 2.5%, unit trusts 6.7%, insurance companies share holding has continued to fall from 21.6% in 1998 to 8.6% in 2010, pension funds holding has fallen from 21.7% in 1998 to 5.1% in 2010, investment trusts 2.1% and other financial institutions increased their hold to 16%. Private non-financial companies hold 2.3%. The rest of the world holds 41.2% of the shares. Charities, church and others hold 0.9%. The public sector increased its hold from 0.1% in 1998 to 3.1% in 2010.

FTSE 100 companies comprised 81.7% of the total value of the stock market at the end of 2010. The rest of the world holdings of shares geographical breakdown shows North America owns 56%, Europe 28% and Asia 11%.

Inflation Down To 4.2% In December

CPI annual inflation for Decmber 2011 stood at 4.2%, down from 4.8% in November. The biggest downward pressure came from petrol, gas and clothing. Upward pressure came mainly from landline and mobile telephone charges.

RPI stood at 4.8%, down from 5.2% in November. The main pressures on the RPI came from the same sectors as affected the CPI with upward pressure also coming from car insurance. Data from ONS.

Animal Health Planning Pays

The Farm Business Survey included an animal health and welfare module asking some general questions about animal health planning. It also included more detailed questions on livestock type, expenditure and disease prevention and veterinary expenses.

The analysis carried out on the data collected showed that 73% of farms had a formal written plan for at least one of the livestock species they kept. The principal reason for the health plan was for marketing and farm assurance schemes.

Beef farms with health plans had mortality rates 1.8% lower than farms with no plans and enterprise output (EO) was £10/head higher. They spent £2/head less on vet & med expenses and expenditure on routine vet costs on farms with no plans was double that of farms with plans. A total of 54% of farms with plans were in the low mortality group. Calf mortality was highest in the group with no formal health plans.

Vet & med expenditure on dairy farms did not vary much with economic performance on herd size but the higher performing farms spent more on routine vet services and had the lowest overall mortality rate. The high performance farms were also those with the largest average herd size though they did also have the highest incidence rate for mastitis. The dairy farms with the higher mortality rates spent less on routine vet services and more on non-routine services than farms with lower mortality rates.

Mortality rates on sheep farms without health plans were highest at 7.1% on average. Lamb and ewe mortality was lower overall for farms with formal written plans or instructions and the average EO was £7 higher per breeding ewe than for farms without a plan. Farms with higher mortality rates generally spent less on vet & med than those with lower mortality rates.

Mortality rates on pig farms of all types was 11%. Where the sample was of breeding herds selling weaned or fat pigs the mortality rate went up to 15% and where the holding type was fattening, rearing or other the rate went down to 5%. It was not possible to produce analysis by plan type due to a shortage of the relevant data.

Vets are the main source of information for animal health matters for farmers. Less than a sixth of farmers had specific animal health insurance. The most likely to have insurance were dairy farmers followed by beef, pigs and sheep.

CPI Inflation Falls To 3.2% In June

Headline CPI inflation for June 2010 was 3.2%, down from 3.4% in May and stood at 114.6 (2005=100). The main contributors to the fall in the annual CPI were undoubtedly falling petrol and diesel prices and it was also helped by a record fall in June sales prices for clothing and footwear. Upward pressure on inflation came mainly from rises in air fares and increased insurance premiums.

The CPI rose 0.1% between May and June 2010 but the changes are within the normal range for that period. The main causes of the monthly changes were increases in the prices of computer games ands consoles within the recreation and culture category, increased European and long-haul air fares and a record increase for May to June of 5.7% in transport insurance premiums. The downward pressure from clothing and footwear of a 2.1% fall in prices was due mainly to women's outerwear.

The all-items RPI and the RPIX (RPI excluding mortgage payments) increased by 5% from 5.1% in May. The RPIY (excluding mortgage payments and indirect taxes) increased by 3.8%.

Overseas Share Of UK Stock Market Increased In 2008

The ONS survey of the distribution of beneficial ownership of ordinary shares in quoted companies in the UK showed that the UK stock market was valued at £1,158.4bn at the end of 2008 and that 41.5% of shares, amounting to £481.1bn, were owned by overseas investors. At the end of 2006 it weas 40%.

UK individuals owned 10.7% of ordinary shares worth £117.8bn. In 2006 it was 12.8% and when the survey began in 1963 the proportion was 54% which contrasts with the proportion owned by overseas companies at that time which was 7% and went down to 3.6% in 1981.

Insurance companies owned 13.4% worth £154.9bn, down from 14.7%. Pension funds owned 12.8% worth £148.8bn. The proportion they owned when the survey began was 6.4%. They greatly increased their percentage during the 1980s and 90s. Banks have also increased their share ownership in recent years. Their proportion increased to 3.5%, worth £40.6bn, their highest proprtion since these records began in 1963. Other financial institutions increased to 10%, worth £115.3bn, from 9.6%.

Public sector holdings have risen due to Government interventions in financial companies during the financial crisis of 2008 including the recapitalisations of RBS, Lloyds TSB and HBOS. The proportion has risen to 1.1% or from £2bn to £13bn. It had reached 3.6% in 1975.

FTSE 100 companies continue to dominate the UK stock market. Funds invested in FTSE 100 companies varied from 64.9% for individuals to 96.5% for private non-financial companies and 84.6% of investment in quoted companies was in FTSE 100 companies.

Of the 41.5% of UK ordinary shares owned by the rest of the world, 30% are owned by companies from North America, European companies owned 34% in 2008 compared to 38% in 2001, 17% by Asian companies and 15% by African companies whose percentage has increased since 2004. Australasia and Oceania now has 3% from 1% in 2004.

Bankers Still In Decline As Financials Generally Better

The financial services sector expect business to get better over the next few months for the first time in two years after falls lasting nearly two years. Optimism has risen for the whole business position for the first time in two years. The CBI Financial Services Survey suggests that despite business continuing to fall it is much slower than previously. It is hoped that the general trend will continue to improve though doubts remain over a uniform recovery across all sectors.

Banks increased their spreads to record proportions but remain in decline after giving support to profitability. Business volumes remain well below normal but are set to increase over the next few months. Building societies recorded decreases in income values and spreads leading to lower profitability. Employment is falling. Business volumes have risen in finance houses but not profitability. There have been further sharp falls in employment but less than the last quarter and it expected to continue.

Both general and life insurance volumes have fallen over the last three months. There is optimism in both sectors as volumes are expected to rise. Insurance brokers and securities traders have both seen increases in profitability but securities traders remain cautious. Insurance brokers expect their increases to continue into the next quarter and employment falls were slowest for over a year. Investment managers have seen little change in the quarter despite predictions of falls and employment actually rose. Anticipated falls in volumes and profitability and expected fall in employment mean the outlook for the next few months is not much different.