Retail shareholders entered the sharemarket rally with their lowest holdings in more than a decade as institutional shareholders consolidated their hold over the largest public companies, a new study has found.
Institutions, including large superannuation funds, now account for more than 90 per cent of the issued capital of Australia's top 300 companies thanks to the steady decline in holdings by retail shareholders since 2002.
The study for the Australasian Investor Relations Association indicates a reversal of the "share-owning democracy" fostered by former prime minister John Howard under which direct ownership of shares surpassed levels in other major economies such as the US.
AIRA chief executive Ian Matheson said the figures indicated legislators and regulators might need to overhaul their view of corporate regulation, including the review under way about the future of the annual general meeting and other forms of engagement between public companies and their owners.
