Significant control over Axiata Group Berhad by sovereign wealth funds implies that the general public has more power to influence management and governance-related decisions
A total of 2 investors have a majority stake in the company with 55% ownership
If you want to know who really controls Axiata Group Berhad (KLSE:AXIATA), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 55% to be precise, is sovereign wealth funds. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
While sovereign wealth funds were the group that benefitted the most from last week’s RM1.2b market cap gain, institutions too had a 33% share in those profits.
In the chart below, we zoom in on the different ownership groups of Axiata Group Berhad.
What Does The Institutional Ownership Tell Us About Axiata Group Berhad?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
We can see that Axiata Group 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. 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 Axiata Group Berhad's historic earnings and revenue below, but keep in mind there's always more to the story.
KLSE:AXIATA Earnings and Revenue Growth May 6th 2024
We note that hedge funds don't have a meaningful investment in Axiata Group Berhad. Looking at our data, we can see that the largest shareholder is Khazanah Nasional Berhad with 37% of shares outstanding. In comparison, the second and third largest shareholders hold about 18% and 18% of the stock.
After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.
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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Axiata Group Berhad
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 data suggests that insiders own under 1% of Axiata Group Berhad in their own names. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own RM16m worth of shares. 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
The general public-- including retail investors -- own 12% stake in the company, and hence can't easily be ignored. 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.
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. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Axiata Group Berhad you should know about.
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.
