Average length of time to hold a share on London Stock Exchange?

EIGHT SECONDS (the source is Radio Four’s today programme this morning).

This exposes as a lie the idea that the Stock Exchange is a source of capital and long term finance for what used to be called the Joint Stock Company.

The London Stock Exchange is a casino – pure and simple.

This is yet further evidence of the financialisation of everything. The City’s so-called success comes from exploiting the ‘value’ in pre-existing assets, not in actually being home to a Stock Exchange that arranges future ‘patient’ finance for industry.

Hurry up, I calculate that you should have traded at least a couple of shares by now…

Comments

  1. Andrew -

    “Average”? Mean, median or mode? What is the distribution? Presumably skewed quite a lot by high frequency trading? And how has it changed over time? No doubt it was considerably longer before the “big bang”, but was more or less than eight seconds a decade, or two or three decades, ago?

    I share your concern about short term incentives and short term thinking, but I don’t follow your points about financialisation or lack of capital raising, in this case. The stock exchange has not been financialised. It was always financialised.

    A primary share issue raises capital – in the main, new shares are issued for cash subscriptions. It is not clear to me how the frequency of trading in the secondary market (or lack thereof) impinges on the capital raised in the primary share issue (or indeed secondary issues). For sure, later market participants are speculating in existing assets, but the original subscribers have put up cash and then passed that existing equity interest on to others.

    1. Peter May -

      Agree with all that. My point was that the stock exchange very rarely serves to raise new finance. It is really all about gambling with the chips already existing on the table, which was never (originally supposed to be) its purpose. It has been ‘financialised’ in the sense that shareholders are now not committed and short termist. It doesn’t serve to raise long term finance for new companies. That is nowadays bordering on the non-existant and far too complicated for ‘clever’ city traders….
      If the stock exchange were really about long term finance the shares should either not be tradable for 5 years (and perhaps annually after that) or lose face value every time they are.

  2. Brenda Steele -

    I would be curious to know some other stats – like how much in fees and how much in profits.

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