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Feb 12, 2017

North American companies have highest level of domestic investment

Domestic shareholders highly concentrated at small-cap companies

North American companies have the highest level of domestic investment of firms in any geographic region, with an average of 87 percent of shares held within the region, according to sister publication IR Magazine Global Investor Relations Practice Report 2016. The same level was seen in 2015.

Domestic investment is further concentrated at small-cap North American companies, where 91 percent of shares are held by domestic investors. This falls incrementally to 77 percent at mega-caps, where one in five shares (20 percent) are held by European investors.

The proportion of North American company shares held by institutional investors has fallen from 71 percent in 2015 to 67 percent in 2016. This remains the greatest proportion in any region, 15 percentage points above the 52 percent of shares in European firms held by institutions.

The 20 percent of shares held by individual shareholders also makes North American companies the most reliant on retail investors. Just 1 percent of North American shares are state-held.

Putting this into a wider geographic context, 56 percent of stock globally is held by institutional investors, 18 percent by individual/retail shareholders and 15 percent by company founders and their families.

From small cap to large cap, North American companies have the fewest sell-side analysts covering them compared with Europe and Asia. Mega-cap companies lost more than one whole analyst in 2016, while mid-cap companies gained one. Large-cap companies have seen an average rise of 0.7 analysts following them.

Looking at investor meetings on a regional basis, North American companies held the least over the past year – 158 one-on-one meetings – a figure that remains exactly the same as 2015. That said, there is one interesting qualification to this figure: senior management members attended six more of these meetings than they did the previous year, so the percentage of meetings involving senior management has risen from 55 percent to 59 percent, the highest percentage of senior management involvement across all regions.