RHB Bank Berhad (KLSE:RHBBANK) is favoured by institutional owners who hold 76% of the company

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

Sun, Jan 12, 2025, 7:40 PM 4 min read

Key Insights

Significantly high institutional ownership implies RHB Bank Berhad's stock price is sensitive to their trading actions
A total of 3 investors have a majority stake in the company with 59% ownership
Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

Every investor in RHB Bank Berhad (KLSE:RHBBANK) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 76% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.

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

View our latest analysis for RHB Bank Berhad

ownership-breakdown — KLSE:RHBBANK Ownership Breakdown January 13th 2025

What Does The Institutional Ownership Tell Us About RHB 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.

We can see that RHB Bank Berhad does have institutional investors; and they hold a good portion of the company's stock. 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 RHB Bank Berhad, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth — KLSE:RHBBANK Earnings and Revenue Growth January 13th 2025

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. RHB Bank Berhad is not owned by hedge funds. Employees Provident Fund of Malaysia is currently the company's largest shareholder with 39% of shares outstanding. OSK International Asset Management Sdn Bhd is the second largest shareholder owning 10% of common stock, and Permodalan Nasional Berhad holds about 9.2% of the company stock.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 59% stake.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of RHB Bank 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.

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 RHB Bank Berhad. 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 RM403k 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

The general public, who are usually individual investors, hold a 22% stake in RHB 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.

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 example, we've discovered 1 warning sign for RHB Bank 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.