With 35% ownership, Kenanga Investment Bank Berhad (KLSE:KENANGA) insiders have a lot at stake
Simply Wall St
5 min read
A look at the shareholders of Kenanga Investment Bank Berhad (KLSE:KENANGA) can tell us which group is most powerful. The group holding the most number of shares in the company, around 35% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
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 take a closer look to see what the different types of shareholders can tell us about Kenanga Investment Bank Berhad.
What Does The Institutional Ownership Tell Us About Kenanga Investment 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.
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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Kenanga Investment Bank Berhad, (below). Of course, keep in mind that there are other factors to consider, too.
KLSE:KENANGA Earnings and Revenue Growth January 9th 2023
Hedge funds don't have many shares in Kenanga Investment Bank Berhad. Looking at our data, we can see that the largest shareholder is Cahya Mata Sarawak Berhad with 19% of shares outstanding. In comparison, the second and third largest shareholders hold about 14% and 4.8% of the stock. Paduka Tengku Noor Binti Tengku Ismail, who is the second-largest shareholder, also happens to hold the title of Top Key Executive. In addition, we found that Wai Chay, the CEO has 0.8% of the shares allocated to their name.
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 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. 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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
It seems insiders own a significant proportion of Kenanga Investment Bank Berhad. Insiders own RM227m worth of shares in the RM643m company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.
General Public Ownership
With a 27% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Kenanga Investment Bank Berhad. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private Company Ownership
We can see that Private Companies own 6.0%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Public Company Ownership
It appears to us that public companies own 19% of Kenanga Investment Bank Berhad. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 1 warning sign for Kenanga Investment Bank Berhad that you should be aware of.
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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