Individuals, households can perform economic activities, or possess capital investment as sole proprietors or as owners of joint partnerships, corporations. In the Hungarian macro-statistics, sole proprietors, self-employed persons form part of households (they are not separated from the households), while joint partnerships and corporations are positioned within the corporations sectors, and households may hold equity in these entities (shares or other equity, that is, some financial assets). The number of operating sole proprietorships is constantly above 200,000, and their increasing aggregate net worth may have been over HUF 1,800 billion at the end of 2014. The number of Hungarian and non-resident partnerships and corporations operating with household equity is close to 470,000, and the equity holding of households in these entities amounted to HUF 11,166 billion and HUF 12,615 billion at the end of 2014 and 2015, respectively, based on financial accounts data.
The survey mentions the sole proprietorships of 222,000 households worth HUF 1,221 billion in value (of aggregate net worth), and 336,000 households were found to have some equity holdings in one or more partnerships or corporations, while the number of corporations concerned was in excess of 350,000 in 2014.22 According to the HFCS, of the 336,000 households having some corporate capital investment (shares or other equity), 55,000 mentioned that they (also) keep quoted shares (43,000 of them had only quoted shares) and 29,000 were also self-employed. Hence, the overlap of the households having some interest in sole proprietorships (self-employment) and those having some interest in joint partnerships (corporations)
22 Mainly the small amount capital investments of below HUF 1 million are missing from the survey. These may have been left out of the survey, as marginal investments, in view of their small value (e.g. having zero or negative own equity).
is small. As opposed to the households having some ownership in partnerships, households operating sole proprietorships are not part of the wealthiest and highest income group; their average annual income was HUF 5.4 million and their average net worth was HUF 29.4 million at the end of 2014 (Table 3-3-2). The corresponding indicators of households having some equity in partnerships and corporations reached HUF 8.1 and 78 million at the same point in time according to the survey data aligned to the national accounts. In addition to income from employment, property incomes also greatly contributed to the outstanding revenue levels; the average amount of such property income was HUF 1.7 million per household, corresponding to a 5 per cent yield.
Table 3-3-2
Income and wealth conditions of certain household groups in 2014, million HUF Main conditions per
household, million HUF All households Households of
pensioners Households of sole
proprietors Households owing partnerships
Gross annual income 3.5 2.7 5.4 8.1
Employee income 2.1 0.8 2.5 3.9
Source: HFCS data aligned to the national accounts.
According to the survey data aligned to the national accounts (financial accounts) at the end of 2014, the corporate equity investments of Hungarian households worth HUF 11,166 billion are composed of quoted shares in the amount of HUF 465 billion (of this, HUF 166 billion worth of foreign shares), of other shares in the amount of HUF 1,281 billion and other equity worth HUF 9,419 billion (of this, HUF 587 billion worth of foreign equity) (these latter items are all referred to as unlisted equity). Quoted shares being part of portfolio investments shall be dealt with more in detail in the Section on securities. This Section covers unlisted equity considered to be direct capital investment. At the end of 2014, the ownership of households in unlisted companies was HUF 10,700 billion at national economy level, representing 12.5 per cent and 27.7 per cent of this sector’s total wealth and financial wealth, respectively. only a narrow margin of households, i.e. 7.1 per cent of all households owned noticeable unlisted stocks. However, this instrument had a decisive share within their wealth. It usually exceeded the value of these families’ non-financial assets. Contrary to the above, in case of those households that do not own equity, the share of deposits, beside the dominating non-financial assets, exceeded the proportion of other instruments (Table 3-3-3). In general, every tenth company receives credit from its owner. This explains why the loans granted represent a higher share within the gross wealth of households owning equity than in the case of the other households where only private credits granted for other households appear.
Table 3-3-3
Composition of wealth of households having and not having unlisted equity, percentage Does the
other equity Listed sharesInsurance and pension
Source: HFCS data aligned to the national accounts.
Table 3-3-4 Distribution of households having unlisted equity by income, gross and net worth, at the end of 2014
Dec ile s
By gross worth per householdsBy net worth per householdsBy income per households Unlisted equity (HUF billion)Unlisted equity (%) Households having unlisted equity (pcs) Households having unlisted equity (%) Unlisted equity (HUF billion)Unlisted equity (%) Households having unlisted equity (pcs) Households having unlisted equity (%) Unlisted equity (HUF billion)Unlisted equity (%) Households having unlisted equity (pcs)
Households having unlisted equity (%) I.2.00.02,893.01.041.30.49,023.03.15.90.16,167.02.1 II.5.30.03,118.01.13.50.02,749.00.97.60.16,212.02.1 III.7.60.15,222.01.814.50.16,831.02.36.30.15,645.01.9 IV.17.40.27,310.02.518.80.28,943.03.029.80.39,873.03.4 V.15.10.15,375.01.841.60.412,176.04.185.90.818,789.06.4 VI.31.10.36,345.02.234.90.35,946.02.096.10.915,579.05.3 VII.85.70.820,727.07.091.80.919,246.06.5146.81.424,613.08.4 VIII.166.61.633,601.011.4149.11.425,042.08.5373.13.546,839.015.9 IX.392.33.761,040.020.7389.13.660,671.020.6487.24.653,707.018.3 X.9,976.693.2148,651.050.59,915.192.7143,655.048.89,461.088.4106,858.036.3 Σ10,699.7100.0294,282.0100.010,699.7100.0294,282.0100.010,699.7100.0294,282.0100.0 Source: HFCS data aligned to the national accounts.
When analysing the territorial distribution of unlisted corporate shares and other equity, households living in Budapest held half of the equity (HUF 5,046 billion), and the value of household investments in Vas, Veszprém and Fejér counties is also outstanding (HUF 1,299 billion, HUF 833 billion and 804 billion, respectively). In the case of households owning unlisted equity, the value of equity per one household was the highest in Vas, Veszprém and Komárom-Esztergom counties (HUF 370 million, HUF 301 million and HUF 257 million). In terms of the age of the reference person, both the total value and the average value of equity holdings was the highest in households where the reference person was aged between 36 and 55 years based on the data at the end of 2014.