Bursa Malaysia Berhad's (KLSE:BURSA) largest shareholders are retail investors with 42% ownership, institutions own 37%

editorial-team@simplywallst.com (Simply Wall St)

Wed, Sep 25, 2024, 9:20 PM 4 min read

Key Insights

Bursa Malaysia Berhad's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
The top 9 shareholders own 51% of the company
37% of Bursa Malaysia Berhad is held by Institutions

If you want to know who really controls Bursa Malaysia Berhad (KLSE:BURSA), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are retail investors with 42% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Institutions, on the other hand, account for 37% of the company's stockholders. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time.

In the chart below, we zoom in on the different ownership groups of Bursa Malaysia Berhad.

See our latest analysis for Bursa Malaysia Berhad

ownership-breakdown — KLSE:BURSA Ownership Breakdown September 26th 2024

What Does The Institutional Ownership Tell Us About Bursa Malaysia 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 Bursa Malaysia Berhad. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Bursa Malaysia Berhad, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth — KLSE:BURSA Earnings and Revenue Growth September 26th 2024

Bursa Malaysia Berhad is not owned by hedge funds. The company's largest shareholder is Capital Market Development Fund, with ownership of 19%. Meanwhile, the second and third largest shareholders, hold 11% and 9.6%, of the shares outstanding, respectively.

We did some more digging and found that 9 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Bursa Malaysia Berhad

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our most recent data indicates that insiders own less than 1% of Bursa Malaysia Berhad. However, it's possible that insiders might have an indirect interest through a more complex structure. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around RM30m worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

With a 42% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Bursa Malaysia 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

Our data indicates that Private Companies hold 19%, of the company's shares. 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.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 1 warning sign for Bursa Malaysia Berhad that you should be aware of before investing here.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.