Singapore Telecommunications' significant private equity firms ownership suggests that the key decisions are influenced by shareholders from the larger public
The largest shareholder of the company is Temasek Holdings (Private) Limited with a 51% stake
Every investor in Singapore Telecommunications Limited (SGX:Z74) should be aware of the most powerful shareholder groups. We can see that private equity firms own the lion's share in the company with 51% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Individual investors, on the other hand, account for 29% of the company's stockholders.
Let's take a closer look to see what the different types of shareholders can tell us about Singapore Telecommunications.
What Does The Institutional Ownership Tell Us About Singapore Telecommunications?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
Singapore Telecommunications 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. 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 Singapore Telecommunications, (below). Of course, keep in mind that there are other factors to consider, too.
SGX:Z74 Earnings and Revenue Growth July 19th 2023
Singapore Telecommunications is not owned by hedge funds. The company's largest shareholder is Temasek Holdings (Private) Limited, with ownership of 51%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With 4.7% and 3.3% of the shares outstanding respectively, Central Provident Fund Board and Capital Research and Management Company are the second and third largest shareholders.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Singapore Telecommunications
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. 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 data suggests that insiders own under 1% of Singapore Telecommunications Limited in their own names. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own S$7.2m of stock. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.
General Public Ownership
With a 29% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Singapore Telecommunications. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Equity Ownership
Private equity firms hold a 51% stake in Singapore Telecommunications. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
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 1 warning sign for Singapore Telecommunications you should know about.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this freereport 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.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Join A Paid User Research Session You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
