While institutions invested in Tenaga Nasional Berhad (KLSE:TENAGA) benefited from last week's 5.3% gain, sovereign wealth funds stood to gain the most
Tenaga Nasional Berhad's significant sovereign wealth funds ownership suggests that the key decisions are influenced by shareholders from the larger public
Every investor in Tenaga Nasional Berhad (KLSE:TENAGA) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 42% 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 RM2.8b market cap gain, institutions too had a 35% share in those profits.
In the chart below, we zoom in on the different ownership groups of Tenaga Nasional Berhad.
What Does The Institutional Ownership Tell Us About Tenaga Nasional 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.
Tenaga Nasional 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 Tenaga Nasional Berhad's earnings history below. Of course, the future is what really matters.
KLSE:TENAGA Earnings and Revenue Growth May 15th 2023
Tenaga Nasional Berhad is not owned by hedge funds. Our data shows that Khazanah Nasional Berhad is the largest shareholder with 25% of shares outstanding. In comparison, the second and third largest shareholders hold about 18% and 16% of the stock.
After doing some more digging, we found that the top 3 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Tenaga Nasional Berhad
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our data suggests that insiders own under 1% of Tenaga Nasional Berhad in their own names. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own RM1.6m 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 22% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Tenaga Nasional 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:
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. Case in point: We've spotted 3 warning signs for Tenaga Nasional Berhad you should be aware of, and 1 of them shouldn't be ignored.
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.
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