What Type Of Shareholders Own The Most Number of The Bank of East Asia, Limited (HKG:23) Shares?

The big shareholder groups in The Bank of East Asia, Limited (HKG:23) have power over the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

Bank of East Asia has a market capitalization of HK$50b, so it's too big to fly under the radar. We'd expect to see both institutions and retail investors owning a portion of the company. In the chart below, we can see that institutions are not really that prevalent on the share registry. We can zoom in on the different ownership groups, to learn more about Bank of East Asia.

Check out our latest analysis for Bank of East Asia

What Does The Institutional Ownership Tell Us About Bank of East Asia?

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.

Since institutions own only a small portion of Bank of East Asia, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. So if the company itself can improve over time, we may well see more institutional buyers in the future. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

It looks like hedge funds own 7.5% of Bank of East Asia shares. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Our data shows that Sumitomo Mitsui Financial Group, Inc. is the largest shareholder with 17% of shares outstanding. With 16% and 13% of the shares outstanding respectively, Fundacion Bancaria Caixa d'Estalvis i Pensions de Barcelona and Hong Leong Company (Malaysia) Berhad are the second and third largest shareholders.

Our research also brought to light the fact that roughly 54% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Bank of East Asia

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.

I can report that insiders do own shares in The Bank of East Asia, Limited. The insiders have a meaningful stake worth HK$3.4b. Most would see this as a real positive. It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 35% ownership, the general public have some degree of sway over Bank of East Asia. 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.

Private Company Ownership

We can see that Private Companies own 29%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Public Company Ownership

We can see that public companies hold 17% of the Bank of East Asia shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Bank of East Asia better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Bank of East Asia (including 1 which is is a bit concerning) .

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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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