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A share owning democracy, if you can keep one

By Ian Silvera
20 June 2024
Financial Communications

The hegemony of the United States isn’t just political or cultural, it’s economic too - and when all of these factors are mixed together you sometimes get potent results. Take UK equities as an example. 

There’s an ongoing debate as to how we get more pension funds, insurers and other financial institutions backing British stocks. How much state coercion or incentives can you introduce to positively change the dial? It’s an almighty question, the correct answer to which could help lead a rival in UK stock markets if you get it right. 

But we already know one important factor for sure: the awareness of US-listed mega-stocks is much more prominent, especially amongst retail investors. They have their own media and following across the likes of YouTube, Reddit and Instagram, with the likes of Tesla, Microsoft and Apple as household names in the UK. 

UK-based trading platforms actively market US mega-caps as part of their advertising. There is no excitement for even some of the biggest companies on the FTSE 100. At a guess, most under-30s (beyond the City) would struggle to name at least five UK-listed companies. 

The trouble is it’s a self-perpetuating cycle. There are seemingly higher returns on the US exchanges, especially with technology stocks. These companies are then covered and followed across video platforms and the traditional media, and then more retail investors subsequently buy these stocks. 

The cycle needs to be broken. Beyond an unwanted nasty macroeconomic event, you eventually come to the conclusion that the whole idea of share ownership in the UK needs a relaunch. You would have to start at the beginning and ask some basic but powerful questions: what is it, why is it important and how can it benefit me? 

The last large-scale public awareness push in Britain around public equities was the ‘Tell Sid’ campaign of the late 1980s, informing people that they could buy shares in the newly denationalised British Gas. 

We clearly need a Tell Sid 2.0, one which is accompanied by some hardcore incentives for investors to back UK equities, whilst also expounding the advantages of taking your company public to the nation’s entrepreneurs. It’s time to normalise shareholding once again.

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