Institutional investors must be pleased after a 7.5% gain last week that adds to MBSB Berhad's (KLSE:MBSB) one-year returns

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

Mon, Aug 12, 2024, 9:32 PM 4 min read

Key Insights

Significantly high institutional ownership implies MBSB Berhad's stock price is sensitive to their trading actions
57% of the company is held by a single shareholder (Employees Provident Fund of Malaysia)
Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls MBSB Berhad (KLSE:MBSB), 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 institutions with 63% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, institutional investors ended up benefitting the most after the company hit RM6.5b in market cap. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 9.7%.

Let's delve deeper into each type of owner of MBSB Berhad, beginning with the chart below.

View our latest analysis for MBSB Berhad

ownership-breakdown — KLSE:MBSB Ownership Breakdown August 13th 2024

What Does The Institutional Ownership Tell Us About MBSB 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.

MBSB Berhad already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 MBSB Berhad's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth — KLSE:MBSB Earnings and Revenue Growth August 13th 2024

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Hedge funds don't have many shares in MBSB Berhad. Our data shows that Employees Provident Fund of Malaysia is the largest shareholder with 57% of shares outstanding. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 1.6% by the third-largest shareholder.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of MBSB 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.

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.

Shareholders would probably be interested to learn that insiders own shares in MBSB Berhad. The insiders have a meaningful stake worth RM97m. Most would see this as a real positive. It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 23% stake in MBSB 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 3 warning signs we've spotted with MBSB Berhad (including 1 which doesn't sit too well with us) .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.