Institutional investors have a lot riding on Malaysia Building Society Berhad (KLSE:MBSB) with 63% ownership

Key Insights

• Institutions' substantial holdings in Malaysia Building Society Berhad implies that they have significant influence over the company's share price
• The largest shareholder of the company is Employees Provident Fund of Malaysia with a 57% stake
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Malaysia Building Society Berhad (KLSE:MBSB), then you'll have to look at the makeup of its share registry. We can see that institutions own the lion's share in the company with 63% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And as as result, institutional investors reaped the most rewards after the company's stock price gained 11% last week. The one-year return on investment is currently 45% and last week's gain would have been more than welcomed.

In the chart below, we zoom in on the different ownership groups of Malaysia Building Society Berhad.

Check out our latest analysis for Malaysia Building Society Berhad

What Does The Institutional Ownership Tell Us About Malaysia Building Society 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.

Malaysia Building Society 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. 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 Malaysia Building Society Berhad, (below). Of course, keep in mind that there are other factors to consider, too.

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. 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 57% of shares outstanding. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 1.6% by the third-largest shareholder.

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. 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 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 most recent data indicates that insiders own some shares in Malaysia Building Society Berhad. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around RM104m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 22% stake in Malaysia Building Society 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:

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. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Malaysia Building Society Berhad (of which 1 makes us a bit uncomfortable!) you should know about.

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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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.