Restructuring of corporate ownership in Australia through the global financial crisis.
Murray, Georgina ; Peetz, David
The global financial crisis through 2007-2009 was a critical period
for finance capital in the USA and UK, and to a lesser extent
continental Europe. The viability of many banks and other financial
corporations was seriously questioned: some disappeared while many
others only survived because of state dispensation of large amounts of
taxpayer-funded largesse. Australian finance capital, by contrast,
escaped the crisis relatively unscathed. Two significant banks were
swallowed up by members of the Big Four, and the viability of the
banking system was crucially reliant on an open-ended state guarantee,
but these were minor developments compared to the traumatic experiences
in the US and Europe. With the discrediting and debilitation of much of
global finance capital, it might have been expected that this would have
taken a step back in terms of its control and ownership of the
Australian economy. Because of the relatively strong performance
outcomes of the Australian economy it might have been expected that
Australian finance capital would have reasserted a new role for itself
in ownership and control within the local economy. But has it?
We address such questions in this article by reference to a global
data set that enables us to estimate ownership of corporations in
Australia and overseas. We do this in the context of recurring debate
about Australian ownership and efforts from time to time by policy
makers or advocates to promote Australian ownership. The central
character in this drama is finance capital. The research question is
about the nature of finance capital in our era of capitalist
'financialisation'. Financialisation is a 'pattern of
accumulation in which profit making occurs increasingly through
financial channels rather than through trade and commodity
production' (Kripzpner 2004:14, also in 2005). But we are not just
interested in the process here but also in the finance capital entities
and their operations; for example, the rentier class of financiers,
described by Gerald Epstein as those creating 'periodic explosions
of financial trading with a myriad of new financial instruments
[emphasizing the] importance of financial markets, financial motives,
financial institutions, and financial elites in the operation of the
economy and its governing institutions, both at the national and
international levels', (Epstein 2006: 3).
Financialisation, Class and the Financial Crisis
Ted Wheelwright was amongst the first to quantify the significance
of foreign investment and ownership in Australia, in particular by
focusing on the extent to which multinational corporations dominated
product markets in Australia. He suggested that Australia always had a
'relationship with and dependence on, its powerful friends'
(1980:xiv). This relationship was reinforced from the 1980s by the
neoliberal recapture of the free market ideology, resulting in the
degradation not just of environmental sustainability but also trust,
financial stability and general humane sociability (O'Hara, 2006).
Wheelwright's numerous works, including Ownership and Control of
Australian Companies (1957), the Anatomy of Australian Manufacturing
Industry (1967, with Judith Miskelly) and Hilda Rolfe (Rolfe, 1967)
showed the fundamental redistribution of class power. In
Wheelwright's later work, The Third Wave written with Abe David
(1989), he looked at how interlocking directorates helped concentrate
and centralise the power of capital. Subsequent research has validated
the importance of interlocking directorates in understanding class power
in Australia (Murray 2001, Robbins & Alexander 2004). Our interest
here is not in the position of directors or subsidiaries of
overseas-owned companies in Australian production. Rather it is in the
patterns of ownership of 'Australian' production--to be
precise, of large 'industrial' (i.e. non-financial)
corporations listed on Australian share markets--and how that has been
changing in the context of the global financial crisis. We will show the
significance of finance capital in ownership, is in no small part due to
the 'financialisation' of the economy.
Paul Sweezy argues that the function of financialisation is to
concentrate and centralize capital within three underlying trends in the
history of capitalism since 1975. These were '(1) the slowing down
of the overall rate of growth, (2) the worldwide proliferation of
monopolistic (or oligopolistic) multinational corporations, and (3) what
may be called the financialization of the capital accumulation
process' (1997, 3-4). All three trends are tied to the cyclical
internal processes within the circuit of capital (Marx 1956; Robinson
and Harris 2000; Murray 2012). Although the unique role and central
regulation of trading banks in Australia were being eroded by the
emergence of non-bank financial institutions through the 1970s (Nowicki
& Tsokhas 1979), we consider that the critical juncture here was
when federal Treasurer Paul Keating deregulated the finance system by
floating the Australian dollar on 8 December 1983. Other key moments
occurred when he granted forty new foreign exchange licenses in June
1984; and when he gave licenses to sixteen foreign banks in February
1985 (see Sykes, 1998).
Capital does not remain the same. This may be due to cycles of
capital (as described in pioneering work by Mandel 1972, Kontratief
1984, and Schumpeter 1934) that are based respectively on too little
money spent on labour, a fall in commodity prices, or a lack of
innovation or a combination of all three. Or, as Dick Bryan suggests, a
lack of surplus may have been created by the 'difference between
the commodity dimension of labour, the value of labour power, and its
non-commodity dimension--the value added by labour, over and above the
value of inputs, or the cost of reproducing the workforce' (Bryan
2010: 1). According to Bryan, the most recent financial crisis meant
'a sudden drying-up of the widely assumed basis of profitability
and capital accumulation--reward for entrepreneurship or risks'
(Bryan 2010).
We aim to understand what the financialisation processes means for
ownership in the context of the break in the accumulation cycle
associated with the global financial crisis (or 'Great
Recession', as it is often known in the US) during the period
2006-7 to 2009-10. This global financial crisis was recognized as
occurring when the 'world stock markets have fallen, large
financial institutions have collapsed or been bought out, and
governments in even the wealthiest nations have had to come up with
rescue packages to bail out their financial systems' (Shah 2012:1).
It arose from the emergence of complex and ultimately incomprehensible
derivative financial instruments such as 'collateralised debt
obligations', promoted inter alia by inappropriate incentive
structures in financial corporations, which led to the failure of
sub-prime loan markets, a crisis of confidence and the freezing of
credit between institutions.
In looking at the ownership of the largest corporations we follow
on from a long-standing literature on the Australian ruling class (e.g.
Rawling, 1937; Fitzpatrick, 1939; Fox, 1940; Wheelwright, 1957; Martin,
1957; Kiddle, 1961; Campbell, 1963; Waterson, 1974; Serle 1971; Connell,
1977; Crough, 1976, 1977a, 1977b, 1981; Nowicki & Tsokhas 1979;
Tsokhas 1984, 1986, 1990; Connell & Irving, 1992; O'Lincoln,
1996; Alexander, 2003; Bryan 1995; Harrigan, 2008), although it is
beyond the scope of this paper to enter into all the debates raised by
that literature. There is also a globally focused literature on the
transnationalisation of capitalism and class with which our research
tries to engage. Christopher Chase Dunn (2009a), for example, refers to
old and new forms of capital, whereby 'both the old interstate
system based on separate national capitalist interests, and new
institutions representing the global interests of capitalists exist and
are powerful simultaneously' (Chase Dunn, 2009a: 34). The parallel
existence of a national and a transnational capitalist class can occur,
whereby each nation-state has a ruling class fraction allied with the
transnational capitalist class. Chase Dunn writes: there has always been
a global capitalist class and it is differentially nationalist as the
world economy and the world polity cycle [move] between waves of
national autarky versus globalization but it is more integrated now than
ever before because the U.S. economy is such a large portion of the
world economy and because institutions of coordination have gotten much
stronger in the most recent wave of globalization. (Chase Dunn, 2009b
pers com).
Bill Carroll (2009) suggests caution against making 'abstract,
polarized characterizations--as in either national or transnational
capitalist class; either an American hegemon bent on world domination or
a Washington that acts at the behest of the transnational capitalist
class;' (Carroll, 2009, 22). Rather, he says that 'the global
partly inhabits and partly arises out of the national'. His work
(2009) shows that key transnational capitalist class members can be
found in northern cities--Paris, London, New York, Brussels, Frankfurt,
The Hague, Zurich and in Montreal--wielding huge amounts of executive
power over resources. Suzanne Soederberg (2006: 666) also shows how
economic liberalism, post 1970s, has enabled transnational capitalist
class interests to prevail over local capitalist class
interests--through the employment of transnational state apparatuses
(e.g. the WTO, WB and IMF) and think tanks to help them initiate, impose
and enforce economic liberalism (Soederberg, 2006).
Other research by Robinson, Harris (2000), and Bryan (1995)
demonstrates how the transnational capitalist class uses global as well
as national circuits of accumulation. The accumulation process
transcends many (but not all) local, national and regional territories
and polities in the search for globally produced goods, markets, labour,
new technologies and services in a worldwide market. This new capitalism
is characterised by the rise of transnationalised capital; the hegemony
of a transnational capitalist class; the emergence of a transnational
state apparatus (TNS); and the appearance of new forms of power and
inequality with the rise of novel relations of inequality and domination
in global society.
In light of the above, the questions we ask are:
* what are the patterns of ownership of large Australian
corporations?
* how significant is the role of finance capital in ownership in
Australia?
* has the role and significance in ownership of finance capital,
and particularly of overseas finance capital or Australian finance
capital, receded or expanded through the global financial crisis?
Our interest is, therefore, not in the role of equities in finance
(e.g. what is the relative importance of debt versus equity
financing?)--but rather, in the role of finance in equities. Our lens
for this paper is Australian data but it is part of a broader project on
international ownership patterns (Peetz & Murray, 2012, 2013) on
which we draw in passing.
Methodology
The principal source for our analysis is a large dataset we have
created from the Osiris global database on corporations operated by
Bureau van Dyk (BvD) in the Netherlands. It includes information on,
amongst other things, market capitalisation, revenue and the names and
nationality of shareholders and their direct and indirect shareholdings
for most listed corporations in most countries. We have focused on the
Australian 'industrial' (non-financial) corporations that were
in the top 200, ranked by revenue, in either of two points of time. Our
first period, T1, is 2006 07; most of the data there relates to the
second half of 2006. Our second period, T2, is 2009-10; most of the data
there relates to the first half of 2010. Because of movement in and out
of the top 200 over that period (comprising, on average, three and a
half years), there are a total of 234 'target' corporations in
our database for this analysis (i.e. corporations that are
'targets' of shareholders). When we refer to the 'top
200' corporations, this is the group under discussion. The shares
recorded in our database for these 234 firms, totalling $600 billion,
account for roughly half of the total market capitalisation of $1.25
trillion for all shares of all 2050 corporations in mid 2010 (ASX 2012).
Further details on our methodology are contained in Appendix 1.
We use the terms 'shareholders' and 'owners'
interchangeably, and readers will notice that when we talk of
'control' we are normally referring to control of the shares,
not necessarily control of the target corporations.
It is also important to note that the use of nominee shareholdings
increased over the period concerned. Table 1 shows that nominee
shareholdings represent 42 per cent of recorded shareholdings in the T1
database, but this rose to 50 per cent in T2. Nominee shareholdings
appear under the name of the company that is acting as the
nominee--typically a bank (93 per cent of nominee holdings were in the
names of banks). The nominee bank normally is not exercising its own
discretion in investment decisions--rather, the (often secret)
beneficial owner of the shares exercises decision-making power and
control. This is quite different to the funds management role typically
exercised by banks, financial corporations, mutual and pension funds and
other arms of finance capital, whereby the funds manager mobilises money
owned by other people and makes decisions on their behalf as to where
the money should be invested. Thus changes in the ownership of fund
managers have a direct impact on control in financial decision-making.
The impact of changes in the ownership of nominee firms on
investment decision-making is much less clear, possibly minor.
Accordingly, we treat nominee and what we call 'ordinary'
(non-nominee) shareholdings differently in this analysis. The removal of
traceable double counting, and the separate treatment of nominee
shareholdings, is a distinct difference between this analysis and
earlier use of global BvD data by Glattfelder and Battiston (2009).
Differences in data quality between T1 and T2 meant that a cautious
approach needed to be employed in comparisons between the two years. For
several tables we focus on 'significant' shareholdings--those
where the holding represents 1 per cent or more of a target
corporation's market capital. This is not only for data quality
reasons: it is also because, if we are interested in questions of
influence, shareholdings of less than 1 per cent are of little real
relevance in influencing a corporation's behaviour. (On the other
hand, when we are interested in questions of 'who benefits',
these smaller recorded shareholdings of less than one per cent are
relevant, but not overly important.)
In analysing our data we avoid the terms 'multinational'
or 'transnational' for overseas capital and instead refer to
such entities as 'overseas' or 'foreign' capital. We
do this simply because many of the large Australia-based share owners
(such as the large banks) are themselves transnational corporations. We
return to this matter in the discussion and conclusion.
Findings
Table 2 shows the nation of ownership of ordinary and nominee
shareholdings in target companies. Where a company holds shares under
several linked and identifiable names we have used the nation of the
parent company. (Thus while Shell Energy Holdings Australia Limited is
an Australia-registered company, it is 100 per cent owned by Royal Dutch
Shell, which is registered in the UK and so it treated as a UK-based
owner in these data.) The left hand half of the table refers to all
recorded shareholdings. As shown there, amongst ordinary recorded
shareholdings, a substantial 5.5 percentage point drop in Australian
ownership occurred during the years of the global financial crisis.
Whereas before the crisis, a (very slight) majority of ordinary recorded
shares was held by Australian interests, by 2009-10 a majority was
foreign owned. A drop of 11 per cent was also recorded in shares held by
British investors. The biggest shift was a 13-percentage point increase
in ownership by American shareholders. The USA went from being the
second to the largest overseas-based holder of shares in top 200
companies. Between them, these three--Australia, UK and USA-countries
accounted for four fifths of all recorded ordinary shares. The
Netherlands, Singapore, and tax havens Bermuda and Switzerland were
ranked next but accounted for much smaller percentages. China was well
below with a mere 0.2 per cent of shares (though note that some
additional Chinese companies are registered in Singapore). One factor in
the decline in British relative to US ownership was the purchase by US
firm BlackRock of Barclay's Global Investors, at the time one of
the world's largest fund managers and with a significant Australian
presence, from British bank Barclays during the financial crisis.
There is, however, potential for these data to be influenced by the
changing composition of the BvD database between T1 and T2. We control
for this possibility, in the right hand side of Table 2, by restricting
our sample to significant shareholdings (i.e. those above 1 per cent of
a company) in those companies which had relatively stable availability
of data between T1 and T2 (that is, the shareholdings data were
available for both T1 and T2 and the total value of shareholdings in the
BvD database in T2 differed from T1 by no more than 20 percentage
points). This means we restrict our sample to 128 companies where
like-with-like comparisons can be made. The impact on the net level of
and shift in overseas ownership is surprisingly small. The shift towards
overseas ownership is as pronounced (around 6 percentage points) when
like-with-like comparisons are made. A bigger impact is had upon the
internal composition of the overseas portion: the drop in UK ownership
becomes much less marked, at just 5 percentage points.
This is in large part because of developments in the second largest
firm in our sample, Rio Tinto Ltd. (Rio Tinto Ltd is the Australian arm,
and Rio Tinto PLC the UK arm, of the Rio Tinto Group). A large portion
of the shares in Rio Tinto Ltd in T1 were held by Tinto Holdings, a
subsidiary of the UK arm Rio Tinto PLC. In 2009 there was a major
buy-back of the shares in Tinto Holdings by Rio Tinto Ltd, so by T2 the
portion held by Tinto Holdings disappears from the data. As the change
in total recorded shareholdings in Rio Tinto was more than 20 per cent,
it is excluded form the right hand, but not the left hand side, of Table
2.
The bottom half of Table 2 shows nominee shareholdings. Here there
has been a very large shift towards foreign ownership--this time
increasing substantially the share of UK owners but also, to a lesser
extent, US owners. The overall proportion of Australian ownership
collapsed from 63 per cent to 32 per cent (though on paper virtually all
nominee ownerships are Australian as overseas banks set up
Australian-registered offshoots to house them). The biggest single
element in this was the sale by Westpac of its 'sub-custody'
(nominee) business to British bank HSBC. At the time, Westpac's was
the largest nominee business in the Australian market. The impact on
foreign control is less certain, however, as the nominee shareholders
usually do the bidding of the ultimate owners. In the immediate term
this would have had little impact on overseas control of Australian
shares (let alone control of Australian corporations) though, in the
long run, it could be expected to increase overseas share control due to
greater marketing of Australian nominee shares in the UK. To avoid
overstating the shift to foreign capital during the financial crisis we
treat ordinary and nominee shares separately in this analysis.
Table 3 shows industry patterns of foreign ownership. The industry
categories are derived from those used in the BvD database and hence not
aligned with ABS categories. Again, the left hand side of the table
refers to all recorded shareholdings, whereas the right hand side refers
to significant shareholdings in firms with stable ownership data
availability. We see substantial variations in foreign ownership by
industry within the top 200 target firms, with the highest rates of
foreign ownership being in the mining sector in both years, which in
turn accounted for over a third of market capitalisation in the top 200
firms. Overseas ownership also increased in most industries. However,
the relatively small increase in foreign ownership in mining is somewhat
of a mirage, due largely to comparison being masked by the Tinto
Holdings buy-back mentioned above. The like-with-like, restricted sample
comparison in the right hand half of Table 3 shows a 12 percentage point
increase in overseas ownership in that industry, double the national
average increase and despite the rise of local mining billionaires such
as Andrew Forrest, Gina Reinhart and Clive Palmer. That said, the
restricted sample comparison shows more inter-industry variation in
overseas ownership changes than the unrestricted comparison (as shown by
the standard deviations shown in the last row of Table 3), implying that
the main variability in ownership changes is occurring within firms as
specific holdings are bought and sold, rather than as a result of
compositional changes in the data between T1 and T2.
Table 4 categorises significant shareholders amongst ordinary
shares, principally using the taxonomy employed by BvD. We focus on
significant shareholdings here because we are interested in seeing where
the locus of control lies. The principal difficulty with the BvD
taxonomy is that the distinction between some of the categories is quite
fungible for example, a 'financial company' or a bank may also
run 'mutual funds'. So we have also aggregated six elements of
finance capital into a single category with that name. The table reveals
the continuing increase in the importance of finance capital as an
owner, not just a financier, of large industrial corporations in
Australia. Finance capital's proportion of ordinary shareholdings
rose from 56 to 59 per cent in the study period. Industrial
companies' share--that is, the proportion of top, listed Australian
non-finance corporations that were owned by other non-finance
corporations from Australia and overseas, including parent
corporations--fell from 38 per cent to 34 per cent. There was an
increase in the proportion owned by named individuals (due for example
to the rise of wealth by mining magnates such as Andrew Forrest), but
these remained small, at below 5 per cent of market capitalisation
(though some individual control was exercised through what appeared in
the database as 'industrial companies').
More substantial were the internal changes within finance capital.
Banks, who in 2006-07 were the dominant form of finance capital, saw
their portion of significant share ownership drop by a third to just 14
per cent in 2009-10. Other financial companies (headed by BlackRock)
more than made up for this, more than doubling their proportion from 11
to 23 per cent, to become the dominant institutions of finance capital.
The share held by mutual and pension funds and comparable entitles
remained fairly stable at around 14 per cent. Included in this are those
held in the name of superannuation funds, but less than half of
superannuation funds are directly invested (the majority are placed with
an investment manager or invested in life office statutory funds) (APRA
2010) and few of the shareholders on our database have
'superannuation' as part of their name. Still, as a result of
compulsory superannuation, Australia has the fourth largest pension fund
pool in the world, with superannuation funds rising from 43 per cent to
53 per cent of Australian funds under management between 2006 and 2011,
and this adds to the resources available to banks, other asset managers
and insurance companies (ASX 2011; AFMA 2011).
At least as significant were the ways in which overseas ownership
interacted with the form of capital. In particular, as Table 5 shows,
over the period there was a substantial increase (5.6 percentage points)
in the holdings of overseas finance capital, while domestic finance
capital actually experienced a reduction of nearly 3 percentage points
in its holdings. Whereas in T1 domestic finance capital had dominated
overseas finance capital, by T2 this ordering has been reversed. The
restructuring of ownership had decisively shifted to overseas finance
capital. The principal component in this was the growth of overseas
financial corporations--in 2006-07 only 31 per cent of 'financial
corporation' shareholdings were under overseas control but, by
2009-10, this figure had doubled to 65 per cent. There were also
increases in overseas penetration, but of much smaller magnitudes,
amongst banks (from 41 to 52 per cent), insurance companies (44 to 48
per cent) and mutual funds. (53 to 56 per cent). This was a quite
remarkable development as the financial crisis was concentrated in North
America and Europe, and Australia appeared, on the surface, to be
relatively protected from its effects. Yet overseas foreign capital
increased its dominance over domestic finance capital during this
period.
Interestingly, the reverse occurred amongst 'industrial
capital' (i.e. non- finance capital). Ownership of industrial
corporations by Australian industrial corporations and by Australian
individuals increased, while ownership by overseas industrial
corporations decreased. This was partly an artefact of the Rio Tinto
buy-back, but also again reflects the growth of some wealthy Australian
industrialists associated with the minerals boom (despite high foreign
ownership in that sector).
An important point of caution, however, needs to be applied in the
interpretation of what is meant by 'industrial companies' or
'industrial capital' in this context. Some industrial capital
is controlled by wealthy families or individuals--although much, when
traced back far enough, is principally in the hands of finance capital.
In the US, where many transnational industrial corporations are based,
our analysis of the ownership of the top 200 industrial firms there
found only 16 per cent of significant shareholdings to be in the hands
of other 'industrial companies' or individuals or families
(Peetz & Murray 2013). The vast majority was owned by finance
capital.
Also noteworthy in the Australian data was an increase in ownership
of significant shareholdings by overseas-based state organisations, and
a decline in ownership of significant shareholdings by state
institutions in Australia. On the one hand, overseas sovereign wealth
funds (such as the Norwegian sovereign fund, financed by taxation and
partial state ownership of natural resources) and overseas state-owned
pension funds have increased their exposure in Australia and elsewhere,
investing in corporations in many countries. On the other hand,
Australia has no sovereign wealth fund, and its major pension funds
(e.g. the Future Fund) or state investment houses (in particular
Queensland Investment Corporation (QIC)) have either divested Australian
assets (the Future Fund sold many of its shares in Telstra, though this
is not fully reflected in the data) and bought some overseas assets, or
in the case of the QIC lost a major funds management customer (QSuper),
leading to QSuper investments shifting from a 'state' to
'mutual fund' classification. In addition, both domestic and
overseas state funds have substantial assets below the
'significant' threshold of 1 per cent, so Table 5 suggests a
more dramatic shift than is really the case. Nonetheless, foreign states
are now more substantial owners of major Australian industrial
corporations than is the Australian state in its various forms.
Table 6 names the major holders of significant shares in large
Australian non-financial corporations in T1 and T2, as well as total
recorded shareholdings in T2. It separately lists holders of ordinary
and nominee shares. Amongst ordinary shareholders, there is a mixture of
finance and industrial capital at the top in both years. Several
features stand out. First, the largest significant shareholder, by a
considerable margin, was BlackRock, a New York-headquartered financial
corporation which was almost absent from Australia in 2006-07 and was
barely noticed in global analyses predating the financial crisis (e.g.
Glattfelder and Battiston 2009). BlackRock is the largest funds manager
in the world, and is also the largest shareholder in the world. Managing
funds in the Americas, Europe, Asia, Australia, the Middle East and
Africa with a staff of over 9,000 in 26 countries, it is a true
transnational finance corporation (Peetz & Murray 2012). In
Australia, and globally, its most important step in reaching this
ranking was its purchase of Barclays Global Investors, ranked eighth
amongst holders of Australian shares in T1. However, it has also made a
strategic decision to invest in Australian equities since T1, something
it had largely ignored until then. BlackRock largely avoided the
negative fallout from the financial crisis in the US; and its CEO is
Larry Fink, who became a key advisor to the US state during the
financial crisis bailout. Illustrating the divisions within finance
capital that have occurred during the financial crisis, Fink is
described as a 'Democrat voting' financier who 'hates
Goldman Sachs' (Andrews 2010). We discuss him more elsewhere (Peetz
& Murray 2012). BlackRock's rise is a major factor in the
growing importance of foreign finance capital in Australia between T1
and T2 shown in Table 5.
Several other observations can be made. Number four rank in both
years was held by American financial corporation, Capital Group, which
was also the second largest shareholder in the US in 2009-10 (Peetz
& Murray 2013). Three other overseas finance capital groups (ING,
Fidelity and Vanguard) featured in the top 20 ordinary shareholders that
year. The Commonwealth Bank, the prime exemplar of domestic finance
capital, slipped from first to third rank. AMP, Perpetual, Macquarie
Bank and National Australia Bank are other major owners of ordinary
Australian shares in both years. For the first three their proportion of
holdings fell, but the ranks of the first two improved slightly due to
the dropping out of Tinto Holdings and Barclays Global Investors. Tinto
Holdings disappeared from the list after T1 because of the share
buyback, but Rio Tinto PLC slightly increased its ranking due to its
controlling interest in major listed resource assets (e.g. Coal and
Allied, in the Hunter Valley of NSW). Royal Dutch Shell held number 2
rank in 2009-10 due to its position in Woodside, from which it has since
announced it is selling out. Other major holdings by parent companies
include Hochtief (via a majority holding in construction corporations
Leightons) and the Coca Cola Company. Billionaire Andrew Forrest, the
Soul Pattinson group and James Packer's Consolidated Press
represent domestic capital. Shining Prospect, at 8th rank in T2, is a
company established by Chinese corporation Chinalco (originally in joint
venture with Canadian Alcoa) to gain a large minority shareholding in
Rio Tinto, seen by many as a bid to block BHP Billiton's hostile
takeover of the latter. The apparent rise of the Australian Government
to number 10 rank in T2 is slightly illusory as its earlier, higher
holdings of Telstra in T1 (via the Future Fund) were not recorded in the
BvD database, and it has been on a ongoing process of selling its
remaining stake in Telstra.
In contrast, amongst nominee shareholdings, HSBC took over
Westpac's number one rank, with NAB and JP Morgan also staying
above 20 per cent each. Citicorp, a major beneficiary of US bailout
funds, became a significant player. Most of the banks with major nominee
holdings had relatively small ordinary holdings.
Table 6 shows a considerable degree of concentration of ownership
of large Australian corporations, with one shareowner holding 11 per
cent of significant shareholdings amongst the top 200. This is a higher
concentration than in Canada (where the top owner, BlackRock, held
around 7 per cent of significant shareholdings in top 200 corporations
in 2009-10) but slightly lower than in the US (where the top owner,
again BlackRock, held 13 per cent of significant shareholdings in the
top 200) (Peetz & Murray 2013). It is notable, of course, that the
same organisation is the top shareholder in three major countries. The
number four-ranked owner in Australia, Capital Group, is also ranked
second in the US and sixth in Canada. Fidelity and Vanguard, both in
Australia's top 20, take two of the remaining three places in the
US top five; with Fidelity also in Canada's top three.
Between T1 and T2, the portion held by the top ranked shareholder
in Australian increased from 8 per cent to 11 per cent, through the
total share of the top three was relatively stable--these three
accounted for 21 per cent of significant shareholdings in both years.
The top 20 ordinary significant shareholders held 53 per cent of
significant shareholdings in T2, a high figure though notably less than
the 62 per cent of T1. Still, what might appear on the surface to be a
weakening of concentration below the highest-level disguises the greater
concentration of ownership in the hands of foreign finance capital.
In 2006-07, the top five Australian finance capital entities held
19 per cent of significant shareholdings but, by 2009-10, this had
fallen by nearly a third, to 13 per cent. By contrast, the top five
foreign finance capital entities grew from 15 per cent of significant
shareholdings to 19 per cent of significant shareholdings by 2009-10.
We also see in Table 6 that the nominee business is extraordinarily
concentrated, with the top three banks in both years controlling over 75
per cent of the market. Its importance lies not so much in explaining
patterns of control, as that control is hidden by nominee arrangements,
as in depicting market concentration in a particular financial product
market.
It is also worth noting that different parts of capital have quite
different strategies for investment. Shareholdings by industrial
corporations are often large, sometimes controlling interests in only
one or a small number of other large listed companies. Finance capital
controls shares across a large number of target companies, with smaller
holdings per company. Even within finance capital there are wide
variations in investment strategy. These may be categorised along
several lines, such as principally active or passive (see Peetz &
Murray 2012), but our interest in these data is in the extent to which
shareholders seek to obtain 'primacy' (number one rankings) in
shareholdings in target corporations.
Table 7 takes a sample of finance capital entities with large
investments (a minimum of investments in 30 target companies) and shows
how their shareholdings are distributed between different ranked
holdings within target corporations in 2009-10. For example, BlackRock
has shareholdings in 130 target corporations and 6 per cent of those
shareholdings are the top ranked ordinary shareholding--that is,
BlackRock is the number 1 ordinary shareholder in 6 per cent of top 200
firms in which it holds shares. It is the number 2 ranked shareholder in
another 11 per cent of firms. This shows the relatively high priority it
evidently attaches to achieving primacy in investments. Capital Group
also attaches priority to primacy--23 per cent of its holdings are
ranked 1 or 2 within target companies. Four large Australian finance
capital corporations also adopt what we call 'high primacy'
strategies: Commonwealth Bank, Westpac, Macquarie Bank and, most
strongly, Perpetual. High primacy provides the potential (though this
might not always be realised) for major institutional shareholders to
exercise control over the behaviour of the target corporations.
Another group we call 'low primacy' shareholders, are
those who spread their investments more thinly with little opportunity
to influence target corporation behaviour. An example is State Street
Corporation--the third largest shareholder in the USA--which has
investments in 49 of Australia's top 200 companies but all of them
are ranked 11th or lower, therefore implying minimal opportunity to
directly influence target behaviour. Dimensional Funds, a Texas-based
investor has holdings in 163 of Australia's top 200 firms--more
than any other- but only 3 per cent of its holdings are ranked first or
second in the companies in which it invests, and 56 per cent ranked 11
or below. Pension funds (such as the Australian Reward Investment
Alliance, covering Commonwealth public service pensions) tend to adopt
low-primacy strategies. The resource-based Norwegian sovereign wealth
fund, which holds shares in 130 of the top 200 Australian corporations,
also adopts a low-primacy strategy, though it has at various times sold
out of companies such as Wal-Mart and Rio Tinto due to concerns about
the ethical behaviour of those corporations.
While Table 6 suggests that Vanguard Group or NAB, which appear in
the top 20 holders of significant holdings of ordinary shares, may have
the capacity to exercise more power through their shareholdings than
does Westpac, which is not in that list, the reality is probably the
reverse. This is because Vanguard's and, to a lesser extent,
NAB's holdings rarely involve primacy, whereas Westpac has a
considerable portion of holdings in which it is the number 1 or 2
shareholder. These patterns are shown in Table 7.
This difference in strategies also means it is necessary to qualify
our interpretations of increasing foreign penetration of ownership.
Amongst the most strategic shareholdings--the number 1 holdings in the
top 200 firms--domestic finance capital had 32 per cent of these top
spots in 2009-10, compared to 20 per cent for overseas finance capital,
27 per cent for Australian industrial corporations, 13 per cent for
overseas industrial corporations, and 7 per cent for wealthy Australian
individuals. In a straight count of companies, Australian capital seems
to have more opportunities to exercise influence, even if the
opportunities to benefit are weighted more heavily towards foreign
capital. But this count across the top 200 companies gives no attention
to the relative size of target companies. If we weight the data by
market capitalisation, we find that domestic finance capital had the
number one shareholdings in firms representing 29 per cent of market
capitalisation in top 200 firms in 2009-10, little more than the 27 per
cent accounted for by overseas finance capital, while the 13 per cent
for Australian industrial corporations was dwarfed by the 23 per cent
accounted for by overseas industrial corporations, and 4 per cent
represented by wealthy Australian individuals. Domestic finance
capital's number one rankings dropped from 43 per cent of market
capitalisation in T1 to 29 per cent in T2. Overseas industrial capital,
and overseas financial capital with primacy strategies evidently focused
attention on the largest firms within the Australian top 200.
Another way of looking at this is to consider the most strategic
holdings in firms who were the 20 largest by revenue in T2. Amongst
those top 20 firms, domestic finance capital had 35 per cent of top
ranking shareholdings in 2009-10, but this was less than the 45 per cent
held by overseas finance capital (up from 35 per cent in 2006-07), 10
per cent by Australian industrial corporations, and 10 per cent by
overseas industrial corporations. In other words, those overseas-based
investors who adopted shareholding primacy as an investment strategy
also chose to focus on the largest of the Australian target corporations
in which to invest.
Discussion
At the beginning we raised the possibility that the global
financial crisis may have led to some restraining of the role of finance
capital in terms of its control and ownership of the Australian
economy--or a shift in favour of Australian finance capital at the
expense of transnational finance capital. These expectations failed to
materialize. The proportion of the top 200 non-financial firms in
Australia held by finance capital increased, and the relative importance
of Australian finance capital declined. Finance capital--particularly,
finance capital based in the heart of the financial crisis, the
USA--increased its ownership of Australian industry. Foreign ownership
was most prominent in the top 200 firms in those involved in the rapidly
expending mining and metals sector. True, many foreign investors
dispersed their shareholdings across large numbers of target
corporations, and so exercised little or no effective control over the
behaviour of these companies whereas some of the largest Australian
finance capital institutions took a more 'primacy'-oriented
approach and concentrated their shareholdings in target corporations to
give them potential to exercise some influence over those companies.
Nonetheless, the more activist of foreign investors took strategic
approaches that focused on obtaining key shareholdings in the largest of
Australian corporations. Prominent shareholders in the US, such as
BlackRock, Capital Group, Fidelity and Vanguard have become prominent
shareholders in Australia and, in the case of the first two, they give
attention to taking strategic positions in target corporations.
The end result is that, at the very top, the ownership of
Australian corporations has become more concentrated than before. It is
more concentrated than in Canada, for example. Although by some
indicators (e.g. the share of the top 20 owners), concentration in
Australia may appear to have diminished (in contrast to the US and
Canada), what has really happened is that concentration in the hands of
foreign finance capital has intensified while that in Australian finance
capital has declined. That is, the role of--and concentration of power
in--overseas capital, and implicitly the transnational class, has
increased in Australia during the global financial crisis. While large
Australian share owners such as the big four banks are themselves
transnational corporations, their global reach is less than that of the
overseas-based finance capitals that are increasing their ownership of
the Australian economy--for example, despite the high Australian dollar
and one of the highest profitability rates in the world, no Australian
banks were in the top 30 banks by assets worldwide in 2011 (Global
Finance 2011). The tendency towards greater concentration needs to be
understood in the context of financialisation and transnationalisation.
In Australia, a significant minority of shareholdings (albeit a
declining one) is in the hands of what are classed as
'industrial' (i.e. not financial) companies, based in
Australia or overseas. However, when you trace back to the USA where
many industrial corporations are based, it turns out that the great
majority of industrial companies are themselves ultimately owned by
finance capital.
Meanwhile, the use of nominee shareholdings, a mask behind which
share ownership is often hidden, also increased substantially between
2006-07 and 2009-10, and there was a very large increase in overseas
ownership of the nominee shareholding industry.
The explanation for these developments does not really lie in the
better performance by overseas finance capital, as measured for example
by rates of return. Rather, much of the restructuring of ownership has
been just that--the outcomes of mergers and acquisitions within finance
capital. For example, BlackRock's acquisition of crisis-ridden
Barclay's Global Investors; HSBC's purchase of Westpac's
sub-custody business, and strategic decisions by overseas finance
capital (for example, BlackRock, a truly transnational firm) to move
into or increase their acquisition of Australian corporations. These
were expansions of finance capital through these purchases of
accumulation under contemporary financialised capitalism.
Nor does the explanation lie entirely within the funds made
available through the US and European bailouts, as several of the top
US-based shareholders in Australia did not directly benefit from bailout
largesse. That said, the crisis enabled BlackRock to assume a strategic
position within the US that it did not possess previously, partly due to
the damage inflicted on others, partly due to the key advisory roles it
assumed with several governments, and partly because of its own merger
and acquisition behaviour. And although the global financial crisis was
fundamentally a crisis of lending and borrowing rather than one of
equities, bailout largesse meant that some parts of finance capital that
would otherwise have had to liquidate their assets were able to prosper
and continue growing. JP Morgan, Merrill Lynch, Citicorp and State
Street were all corporations that benefited by billions of dollars under
the Troubled Assets Relief Program.
Conclusion
Overall, while the global financial crisis has demonstrated the
dangers of financialisation to capitalist societies, the crisis has not
abated the financialisation of capitalism nor, in Australia, the
transnationalisation of finance. If anything, those processes have been
strengthened by it--financialisation and transnationalisation have
intensified--as the validity of distinctions between financial and
industrial, Australian and overseas, and national and transnational
capitals diminish. Such analytical categories remain a useful heuristic
device, perhaps most of all for identifying the trends that are making
these 'distinctions without distinction', but attempts by
policy makers or advocates to favour 'Australian' firms will
do little of substance, as ownership of 'Australian' firms is
increasingly transationalised anyway.
Appendix--Data and Methods
Bureau van Dyk (BvD) updates its data on an ongoing basis, so data
for different shareholders within the same corporation may be entered
and current at different times. Our database has a separate observation
for each shareholder within each target corporation for each of T1 and
T2.
There are therefore 10644 'shareholding units' in our
database. Often a shareholding by a bank (or other financial entity) may
represent the bank mobilising other people's investment funds: the
financial returns (minus a hefty fee) go to the original investors, but
the control of the funds rests with the bank, and the shares are owned
in its name.
Many shares are held indirectly--entity A may directly own shares
in entity C, but often A owns shares in entity B (for example, a
subsidiary or a nominee company) which in turn owns shares in C, giving
A indirect ownership of C. The BvD data is quite good at identifying
these indirect ownership trails, assisted in Australia by stock exchange
requirements for disclosure of large indirect interests. That said, the
process of creating our database is surprisingly long, as once company
level data (N = 234) are joined with shareholder unit level data (N =
10644) a substantial amount of 'cleaning' is necessary because
of the potential for double counting of information for the same
shareholding, entered by BvD under different names and/or at different
points of time. For many targets, the total value of shareholdings
appeared greater than 100 per cent. While every effort has been made to
ensure anomalies are removed, it is feasible that some instances of
double counting remain, mostly amongst the smaller shareholders in the
smaller target corporations.
A more common cause of problems is information on shareholders not
being entered in the first instance by BvD, especially in the earlier,
T1, period. Thus we have 3311 shareholding unit observations in T1 but
7332 in T2. Only 202 of the companies have shareholder data for both T1
and T2. There was a substantial improvement in data quality between T1
and T2. Most of those with missing data for one year (mostly T1) are
smaller corporations, with 22 out of those 30 being ranked lower than
100 by revenue. Most of the difference in data between T1 and T2
concerns smaller shareholdings. In T1 there were 999 shareholding units
in which the shareholder had an interest of 5 per cent or more in a
target corporation, and in T2 that number had risen by a quarter to
1264. By comparison, in T1 there were only 887 shareholding units with
an interest of between 0.2 per cent and 0.99 per cent in a target
company, but in T2 this number more than trebled to 2876. Thus the
composition of T2 data more heavily favours smallholdings. In both
years, shareholdings of less than 0.2 per cent appear to be
under-represented (comprising about 19 per cent of records but barely 1
per cent of the value of shareholdings in the database) although this
has minimal material impact on our overseas findings.
Shareholdings large enough to exert formal direct
'control' over a company (typically over 15 per cent, though
it depends on the magnitudes and motivations of other shareholders) are
rare in our dataset. However, shareholdings below that size still
provide opportunities for influence--if not through holding board
positions, then through explicit, implied or imagined threats to sell
shares, or through discussions over objectives that may be held with
board members or executives. Some comparisons over time also are
restricted to the 128 target companies with relatively stable
availability of data--that is, where shareholding data are available for
both years and where the absolute movement in total recorded
shareholdings between T1 and T2 is less than 20 percentage points.
Restricting the coverage in this way makes some differences to the data
though, as we shall see, overall it confirms the impression created by
the unrestricted findings.
[ILLUSTRATION OMITTED]
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Table 1: Value of Nominee/Depository Shareholdings in
Relation to Value of Total and Recorded Shareholdings
Firms in top 200 in either T1 or T2: 2006-07 ($b) 2009-10 ($b)
Nominee/depository shareholdings 104 256
Total recorded shareholdings 247 509
Total market capitalisation 489 600
Recorded nominees as a proportion 21% 43%
of all shareholdings
Recorded shareholdings as a proportion 51% 85%
of total market capitalisation
Recorded nominees as a proportion of 42% 50%
all recorded shareholdings
N of firms with data 202 232
N of shareholding units in database 3311 7332
Table 2: Changing Composition of National Attributions of
Shareholdings, Top 200 Target of Australian Corporations
All Recorded Shareholdings
2006-07 2009-10 Change
Ordinary
Shareholdings
Australia 50.5 45.0 -5.5
USA 12.1 25.1 13.0
UK 21.1 9.7 -11.4
Netherlands 6.2 3.5 -2.7
Singapore 0.0 2.5 2.5
Bermuda 1.0 1.9 0.8
Switzerland 1.1 1.6 0.5
Canada 0.9 1.4 0.5
France 0.4 1.3 0.9
Norway 0.7 1.0 0.3
Hong Kong 0.1 1.0 0.9
Japan 0.7 0.9 0.1
Germany 2.0 0.7 -1.3
New Zealand 0.9 0.3 -0.7
Sweden 0.3 0.3 0.0
China 0.0 0.2
Others 1.0 .9 0.0
n.a. 0.8 2.8 1.9
Total 100.0 100.0 -0.2
ordinary
Nominee
Shareholdings
USA 23.6 34.3 10.7
Australia 63.4 32.0 -31.4
UK 5.0 31.4 26.4
Switzerland 4.2 1.6 -2.6
Canada 3.9 0.6 -3.3
Others 0.1 0.1
Total nominee 100.0 100.0 0.0
Significant Shareholdings in
Firms with Relatively Stable
Data Availability *
2006-07 2009-10 Change
Ordinary
Shareholdings
Australia 50.3 44.0 -6.3
USA 15.0 28.1 13.1
UK 17.2 12.7 -4.5
Netherlands 6.9 3.6 -3.2
Singapore 0.1 0.0 -0.1
Bermuda 0.8 2.0 1.1
Switzerland 1.8 1.1 -0.7
Canada 0.9 0.0 -0.9
France 0.5 1.4 1.0
Norway 0.3 0.3
Hong Kong 1.3 1.3
Japan 0.2 0.4 0.2
Germany 3.5 0.5 -3.0
New Zealand 0.7 0.3 -0.4
Sweden 0.1 -0.1
China
Others 1.2 1.5 0.3
n.a. .9 2.7 1.9
Total 100.0 100.0 0.0
ordinary
Nominee
Shareholdings
USA 22.7 37.2 15.0
Australia 65.3 30.0 -35.3
UK 4.8 32.1 27.4
Switzerland 3.6 0.4 -3.2
Canada 3.6 0.3 -3.2
Others 0.0 0.0
Total nominee 100.0 100.0 0.0
* 'Relatively stable data availability' means that data on
shareholdings are available for both T1 and T2 and the total value of
shareholdings in the BvD database in T2 differs from T1 by no more
than 20 percentage points.
Table 3: Identified Foreign Ownership of Ordinary
Shares 2006-2010, by Industry of Target Companies
Unrestricted
Overseas Ownership
2006 2010 %
Change
Coal, oil & Metals Mining 70% 70% 0%
Food & Other Manufacturing 57% 69% 11%
Health Manufacturing & Supply 38% 55% 17%
Transport & Utilities 46% 49% 4%
Finance & Inv & EITs 46% 47% 1%
Construction & Heavy 39% 36% -2%
Manufacturing
Hospitality, Retail 31% 32% 2%
and Other Services
Broadcasting, IT, 24% 30% 6%
Communication, etc
Total 49% 52% 4%
Standard Deviation (0.15) (0.15) (0.06)
GE1 LE20
Overseas Ownership
2006 2010 %
Change
Coal, oil & Metals Mining 64% 77% 12%
Food & Other Manufacturing 63% 78% 15%
Health Manufacturing & Supply 37% 57% 19%
Transport & Utilities 59% 48% -11%
Finance & Inv & EITs 56% 50% -6%
Construction & Heavy 38% 26% -12%
Manufacturing
Hospitality, Retail 31% 32% 1%
and Other Services
Broadcasting, IT, 18% 44% 27%
Communication, etc
Total 49% 53% 4%
Standard Deviation (0.17) (0.19) (0.15)
Note: This table excludes missing data so numbers
differ slightly from the previous table
Table 4: Significant Ordinary Shareholdings by Type of Shareholder,
Top 200 Non-Financial Australian Corporations, 2006-07 and 2009-10
Value Value Portion
2006-07 ($m) 2009-10 ($m) (%) 2006-07
Industrial Company 50,444 63,242 38.1
Finance Capital- 71,832 110,546 55.9
comprising
--Financial company 13,794 43,889 10.7
--Bank 26,986 26,331 21.0
--Mutual & Pension 19,039 26,438 14.8
Fund/Nominee/Trust/
Trustee
--Insurance company 11,265 11,506 8.8
--Private equity firms 750 2,365 0.6
--Venture capital 18
One or more 3,001 8,104 2.3
named individuals
or families
Public authority, 3,757 3,268 2.9
State, Govt.
Foundation/ 338 2,498 0.3
Research Institute
Employees/ 405 77 0.3
Managers/
Directors
Other 228.1 19.2 0.2
Total 130,004 187,755 100.0
Portion Change in
(%) 2009-10 Portion
(% points)
Industrial Company 33.7 -4.4
Finance Capital- 58.9 3.0
comprising
--Financial company 23.4 12.7
--Bank 14.0 -7.0
--Mutual & Pension 14.1 -0.7
Fund/Nominee/Trust/
Trustee
--Insurance company 6.1 -2.6
--Private equity firms 1.3 0.7
--Venture capital 0.0 0.0
One or more 4.3 2.0
named individuals
or families
Public authority, 1.7 -1.1
State, Govt.
Foundation/ 1.3 1.1
Research Institute
Employees/ 0.0 -0.3
Managers/
Directors
Other 0.0 -0.2
Total 100.0 0.0
Table 5: Proportion of Ordinary Shareholdings by Type
of Capital, 2006-07 and 2009-10
2006-07 2009-10 Change
Overseas finance capital 25.0% 30.6% 5.6%
Australian finance capital 31.1% 28.2% -2.9%
Overseas industrial corporations 24.9% 17.7% -7.2%
Australian industrial corporations 13.2% 16.0% 2.8%
Australian individuals/families 2.3% 4.3% 2.0%
Overseas state 0.1% 1.4% 1.3%
Australian state 2.8% 0.4% -2.4%
Other 0.6% 1.4% 0.8%
Total 100.0% 100.0% 0.0%
Note: Excludes where nation not known
Table 6a: Top Ranked Significant Ordinary
Shareholdings, 2006-07 and 2009-10,
2006-07 rank and 2006-07
shareholder significant
shareholdings
Value %
($m)
Ordinary
Commonwealth Bank Of Australia 10,076 7.8
Tinto Holdings Australia Pty Ltd 10,055 7.7
Royal Dutch Shell Plc 6,888 5.3
Capital Group 6,295 4.8
Ing Groep Nv 5,181 4.0
Amp Limited 5,095 3.9
Rio Tinto Plc 4,569 3.5
Barclays Global Investors Limited 4,567 3.4
Perpetual Limited 4,395 3.0
Consolidated Press Holdings 3,653 2.8
State Of Queensland 2,955 2.3
Macquarie Bank Ltd 2,560 2.0
Maple-Brown Abbott Ltd. 2,447 1.9
Hochtief 1,972 1.7
Chevron Energy Solutions L.P. 1,710 1.5
Merrill Lynch & Co., Inc. 1,702 1.3
Fidelity Group 1,601 1.3
Stichting 1,590 1.2
Pensioenfonds Abp
Ioof 1,440 1.2
Coca-Cola Company (The) 1,330 1.1
2009-10 rank 2009-10 2009-10
and shareholder significant recorded
shareholdings shareholdings
Value % Value %
($m) ($b)
Ordinary
Blackrock, Inc. 20,903 11.1 21,267 8.6
Royal Dutch Shell Plc 10,299 5.5 10,299 4.2
Commonwealth Bank Of Australia 7,959 4.2 8,250 3.3
Capital Group 6,052 3.2 7,125 2.9
Amp Limited 5,736 3.1 9,041 3.7
Rio Tinto Plc 5,698 3.0 5,701 2.3
Perpetual Limited 4,670 2.5 5,422 2.2
Shining Prospect Pte Ltd 3,799 2.0 3,799 1.5
Ing Groep Nv 3,781 2.0 4,714 1.9
Government Of Australia 3,673 2.0 4,991 2.0
Forrest Andrew 3,300 1.8 3,300 1.3
Hochtief 3,124 1.7 3,124 1.3
Macquarie Bank Ltd 3,041 1.6 4,482 1.8
Washington H Soul Pattinson & Company 2,883 1.5 2,893 1.2
Fidelity Group 2,758 1.5 4,335 1.8
National Australia Bank Limited 2,337 1.2 2,338 0.9
Coca-Cola Company 2,306 1.2 2,306 0.9
Consolidated Press Holdings 2,283 1.2 2,287 0.9
Vanguard Group, Inc. The 2,123 1.1 4,509 1.8
Lowy Family And Associates 1,992 1.1 1,992 0.8
Table 6b: Top Ranked Significant Nominee
Shareholdings, 2006-07 and 2009-10
2006-07 rank and 2006-07
shareholder significant
shareholdings
Value %
($m)
Nominee/depository --
Westpac Banking Corporation 27,466 27.9
National Australia Bank 23,490 23.8
JP Morgan Chase 23,415 23.8
Australia And New Zealand 9,877 10.0
Banking Group
Ubs Ag 3,476 3.5
Rbc Dexia Investor Services 3,187 3.2
Rbc Global Services 3,170 3.2
Australia Nominees Pty
Chase Manhattan Nominees 1,640 1.7
2009-10 rank 2009-10 2009-10
and shareholder significant recorded
shareholdings shareholdings
Value % Value %
($m) ($b)
Nominee/depository --
Hsbc Holdings Plc 70,095 29.8 70,345 28.6
National Australia Bank 54,916 23.4 55,057 22.4
JP Morgan Chase 53,136 22.6 53,169 21.6
Citicorp Nominees Pty Ltd 29,132 12.4 30,766 12.5
Australia And New 12,298 5.2 13,199 5.4
Zealand Banking Group
Cogent Nominees Pty Ltd 5,838 2.5 6,751 2.7
Rbc Dexia Investor Services 4,644 2.0 6,735 2.7
Rbc Global Services 1,438 0.6 1,469 0.6
Australia Nominees
Table 7: Distributions of Rankings of Shareholdings,
Selected Major Shareholders 2010
No of target Distribution of ranking
corporations of shareholdings within
in which target corporations
this holder
own shares 1 2 3-5 6-10 11+'
High-primacy
shareholders
Perpetual Limited 66 14% 23% 29% 11% 24%
Capital Group 44 14% 9% 23% 30% 25%
Westpac Banking 43 9% 12% 37% 9% 33%
Corporation
Commonwealth Bank 81 7% 11% 30% 33% 19%
Of Australia
Macquarie Bank Ltd 78 6% 5% 9% 26% 54%
Blackrock 130 6% 11% 35% 21% 28%
Low-primacy
shareholders
National Australia 35 0% 9% 37% 31% 23%
Bank Limited
Dimensional Fund 163 1% 2% 11% 30% 56%
Advisors Lp
Government Of Australia 73 1% 1% 0% 19% 78%
Vanguard Group, Inc. 69 0% 0% 10% 28% 62%
State Of Queensland 116 0% 1% 3% 30% 66%
Government Of Norway 130 0% 0% 3% 25% 72%
Australian Reward 42 0% 0% 0% 26% 74%
Investment Alliance
Stichting 95 0% 0% 2% 24% 74%
Pensioenfonds Abp
Axa 81 0% 2% 9% 10% 79%
State Street 49 0% 0% 0% 0% 100%
Corporation
