Think of a number!

Think of a number!

As a bit of a detour from individual stock analysis, I have spent some time recently revisiting my databases and some of the three-quarter baked mapping algorithms that I have evolved over time. I will perhaps talk more about my databases and why I have them another time, but for now I want to share something that you may find interesting.

I was the type of child who took his toys apart to see how they worked, so if you are of a similar vein you may find some interest here.

Let me start with my stock market pub quiz question.

How many companies are listed on the UK stock market?


Please take a guess before scrolling down








So, what was your guess? Based on a very unscientific mini-poll, I would suspect the knowledgeable to have guessed somewhere in the region of 2,000.

Helpfully, the London Stock Exchange provide a month-end snapshot of listings on the UK market (main market and aim) which can be found here.

Instruments and Issuers.


I am working here on the LSE data for the end of July.

The data reveal that the number of instruments listed at the end of July was 4,092.

Made up of:

  • 1,858 Exchange Traded Funds.
  • 215 Depository Receipts. (essentially the equivalent of a number or fraction of shares listed in other countries.)
  • 3 Other instruments (Of which I know nothing)
  • And 2,016 shares.

So that is the answer. Right? Not exactly.


Quite a few companies issue different classes of shares. These may be A shares / B shares etc., preference shares, shares with or without voting rights and so forth.

These may well have their own investment merits, but I want to understand the individual companies before deciding which instrument may be the best vehicle by which to invest in them.

Helpfully, LSE also produces a list of Issuers [of shares]. This shows (again at the end of July) 1,998 issuers; surely that is the answer?

Not so, to start with 126 of those “Issuers” do not in fact have any classes of shares in issue, which brings the total to 1,872 active issuers. So far!


Thankfully, there is no prize for my quiz question as there is certainly quibble room in how I am now refining (or is that just changing?) my definition here.

One issuer (Bank of Ireland) list two classes of “shares” both of which are classified by LSE as “Standard Debt”.

A further 15 companies list only Preference Shares in London.

There are 345 Closed Ended Investment Funds and 1 Open Ended Investment Fund (mostly these appear to be VCTs).

Then, there are approximately 51 companies that appear to be some kind of investment company, investment fund or investment trust. This is approximate as in the absence of any clear categorisation here I have had use my judgement to define them. (I let some REITs through this filter.)

Essentially, I have “refined” my definition from company to “trading company”.

The other share classes that I have eliminated might indeed be decent investments, but I would need a very different set of criteria to assess them that I would use for trading companies.

The final answer?

The net total of companies left after the eliminations above is 1,459 companies.

That is still, however, not my final answer. There are a number of stocks – maybe as many as 150 which I think may be secondary listings of stocks that have a primary listing elsewhere. Examples being Air China [LON:AIRC] which I think has a primary listing in Hong Kong (as well as ADRs in the US) and Barloworld [LON:BWO] which I believe has a primary listing in South Africa.

As far as I can see (and I would really welcome reader comments  if you know better) there does not appear to be any DATA that defines these, so I may have to resort to a manual review.

I suspect though that my final answer may be somewhere in the region of 1,300 – 1,350.

Does any of this really matter?

Personally, I think so.

Reviewing the list of stocks that pass my filters thus far, I could probably give a decent precis of what around 2/3 thirds of them actually do. Some I had completely forgotten were listed and they may be missed opportunities.

I you want a significant degree of diversification in your portfolio (as I do) it is worth having a clear view of what your investable universe is.

1,300 or more stocks is definitely too many to know all of them with any degree of intimacy. If you apply your additional personal filters, however, you can get to a more manageable number.

For what it is worth, I tend to eschew: Resource Stocks, Early stage Biotech and in fact most pre-profitability companies (except those that are demonstrably near profitability) and that narrows down the field a lot.

Epilogue. (My personal moan!)

I am not sure if it just me that gets frustrated by the poor quality of classification provided by the markets (and indeed many of the third-party information providers)? I spent most of my first career working with unreconciled data definitions (you would be surprised how few people in the world can even spell ISO) but it was always possible to deploy standardisation.  Why do the markets make this stuff so hard?

It is tempting to think that retail investors are being starved of information that the institutions have; but from experience I am inclined to think that maybe attention to detail is actually missing at all levels.

It is frustrating, but I continue to persevere.



Wordpress (0)
Your Cart