Public Bank Berhad (KLSE:PBBANK) is favoured by institutional owners who hold 42% of the company
Key Insights
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Institutions’ substantial holdings in Public Bank Berhad implies that they have significant influence over the company’s share price
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The top 6 shareholders own 50% of the company
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Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock
To get a sense of who is truly in control of Public Bank Berhad (KLSE:PBBANK), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are institutions with 42% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.
Let’s take a closer look to see what the different types of shareholders can tell us about Public Bank Berhad.
Check out our latest analysis for Public Bank Berhad
What Does The Institutional Ownership Tell Us About Public Bank Berhad?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
We can see that Public Bank Berhad does have institutional investors; and they hold a good portion of the company’s stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It’s therefore worth looking at Public Bank Berhad’s earnings history below. Of course, the future is what really matters.
Hedge funds don’t have many shares in Public Bank Berhad. Consolidated Teh Holdings Sdn Berhad is currently the company’s largest shareholder with 23% of shares outstanding. Employees Provident Fund of Malaysia is the second largest shareholder owning 15% of common stock, and Kumpulan Wang Persaraan holds about 4.1% of the company stock.
We did some more digging and found that 6 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Public Bank Berhad
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our information suggests that Public Bank Berhad insiders own under 1% of the company. However, it’s possible that insiders might have an indirect interest through a more complex structure. As it is a large company, we’d only expect insiders to own a small percentage of it. But it’s worth noting that they own RM126m worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.
General Public Ownership
With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Public Bank Berhad. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Private Company Ownership
It seems that Private Companies own 24%, of the Public Bank Berhad stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next Steps:
It’s always worth thinking about the different groups who own shares in a company. But to understand Public Bank Berhad better, we need to consider many other factors. Case in point: We’ve spotted 2 warning signs for Public Bank Berhad you should be aware of, and 1 of them makes us a bit uncomfortable.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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