A look at the shareholders of Kenanga Investment Bank Berhad (KLSE:KENANGA) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 35% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
So it follows, every decision made by insiders of Kenanga Investment Bank Berhad regarding the company's future would be crucial to them.
Let's delve deeper into each type of owner of Kenanga Investment Bank Berhad, beginning with the chart below.
What Does The Institutional Ownership Tell Us About Kenanga Investment Bank Berhad?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
As you can see, institutional investors have a fair amount of stake in Kenanga Investment Bank Berhad. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Kenanga Investment Bank Berhad's historic earnings and revenue below, but keep in mind there's always more to the story.
KLSE:KENANGA Earnings and Revenue Growth June 19th 2023
Hedge funds don't have many shares in Kenanga Investment Bank Berhad. Our data shows that Cahya Mata Sarawak Berhad is the largest shareholder with 19% of shares outstanding. For context, the second largest shareholder holds about 14% of the shares outstanding, followed by an ownership of 4.8% by the third-largest shareholder. Paduka Tengku Noor Binti Tengku Ismail, who is the second-largest shareholder, also happens to hold the title of Top Key Executive. Additionally, the company's CEO Chay Leong directly holds 0.8% of the total shares outstanding.
We did some more digging and found that 7 of the top shareholders account for roughly 53% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of Kenanga Investment Bank Berhad
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our information suggests that insiders maintain a significant holding in Kenanga Investment Bank Berhad. Insiders have a RM224m stake in this RM639m business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 29% stake in Kenanga Investment 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
We can see that Private Companies own 4.4%, of the shares on issue. 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.
Public Company Ownership
We can see that public companies hold 19% of the Kenanga Investment Bank Berhad shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.
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.
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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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