Are Institutions Heavily Invested In Malaysia Building Society Berhad's (KLSE:MBSB) Shares?

By
Simply Wall St
Published
August 26, 2021
KLSE:MBSB
Source: Shutterstock

A look at the shareholders of Malaysia Building Society Berhad (KLSE:MBSB) can tell us which group is most powerful. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. We also tend to see lower insider ownership in companies that were previously publicly owned.

Malaysia Building Society Berhad has a market capitalization of RM4.7b, so we would expect some institutional investors to have noticed the stock. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about Malaysia Building Society Berhad.

Check out our latest analysis for Malaysia Building Society Berhad

ownership-breakdown
KLSE:MBSB Ownership Breakdown August 27th 2021

What Does The Institutional Ownership Tell Us About Malaysia Building Society Berhad?

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.

We can see that Malaysia Building Society Berhad does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Malaysia Building Society Berhad's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
KLSE:MBSB Earnings and Revenue Growth August 27th 2021

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don't have a meaningful investment in Malaysia Building Society Berhad. Our data shows that Employees Provident Fund of Malaysia is the largest shareholder with 66% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Tadhamon Capital B.S.C. is the second largest shareholder owning 1.4% of common stock, and The Vanguard Group, Inc. holds about 0.9% of the company stock.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Malaysia Building Society 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.

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 Malaysia Building Society Berhad. Keep in mind that it's a big company, and the insiders own RM46m 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 holds a 28% stake in Malaysia Building Society Berhad. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Malaysia Building Society Berhad better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Malaysia Building Society Berhad , and understanding them should be part of your investment process.

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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