Sime Darby Berhad's (KLSE:SIME) largest shareholders are sovereign wealth funds with 47% ownership, institutions own 37%

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

Sat, Oct 28, 2023, 8:14 PM 4 min read

If you want to know who really controls Sime Darby Berhad (KLSE:SIME), then you'll have to look at the makeup of its share registry. With 47% stake, sovereign wealth funds possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Meanwhile, institutions make up 37% of the company’s shareholders. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.

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

View our latest analysis for Sime Darby Berhad

ownership-breakdown — KLSE:SIME Ownership Breakdown October 29th 2023

What Does The Institutional Ownership Tell Us About Sime Darby 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 Sime Darby 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. 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 Sime Darby Berhad, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth — KLSE:SIME Earnings and Revenue Growth October 29th 2023

We note that hedge funds don't have a meaningful investment in Sime Darby Berhad. The company's largest shareholder is Permodalan Nasional Berhad, with ownership of 47%. With 15% and 7.9% of the shares outstanding respectively, Employees Provident Fund of Malaysia and Kumpulan Wang Persaraan are the second and third largest shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 62% stake.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Sime Darby Berhad

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 information suggests that Sime Darby Berhad insiders own under 1% of the company. Keep in mind that it's a big company, and the insiders own RM2.8m worth of shares. The absolute value might be more important than the proportional share. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 16% stake in the company, and hence can't easily be ignored. 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:

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. Take risks for example - Sime Darby Berhad has 1 warning sign we think you should be aware of.

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.