A five-year buying spree by small investors came to an end last year, as strategic investors - those with stakes of more than 10 per cent in listed companies - made their mark.
But overseas ownership of New Zealand shares, estimated at 47.1 per cent in December, was unchanged from the
year before, according to investment house JB Were's annual sharemarket ownership analysis.
Foreign investors significantly reduced their combined stakes in 12 sharemarket-listed companies last year.
But this was more than offset by substantial increases in overseas ownership of four bigger companies, JB Were economist Bernard Doyle said.
"A decent-sized increase in overseas ownership of Telecom was the key to keeping the market's overall overseas ownership level quite steady.
"It was mainly overseas-managed funds upping their stakes."
The portion of the sharemarket held by retail investors dipped to an estimated 22.7 per cent last year from 25.1 per cent in 2000, after rising steadily from less than 17 per cent in 1997.
Though latest retail investment comparisons from other markets were not available, the figure was generally low by world standards and well below New Zealand levels during the heady days of the 1980s, Mr Doyle said.
"And last year was not a great one for floats. New issues do tend to perk up retail interest in the market, so hopefully we'll see a few more this year."
The latest survey also found a sharp jump in the importance of strategic stakes (both from New Zealand and overseas) of more than 10 per cent in listed companies, at the expense of smaller portfolio investors.
Strategic investors were estimated to hold 41.5 per cent of the market in December, up from 35.1 per cent a year earlier.
Mr Doyle said it was important that sharemarket ownership did not become too concentrated in the hands of one or two investor categories.
"We want to see portfolio investors owning a good chunk of the market, as trade buyers can lead to market liquidity declining."
- NZPA
