Institutions own 25% of IOI Corporation Berhad (KLSE:IOICORP) shares but private companies control 53% of the company

Key Insights

• Significant control over IOI Corporation Berhad by private companies implies that the general public has more power to influence management and governance-related decisions
• The largest shareholder of the company is Progressive Holdings Sdn. Bhd. with a 50% stake
• Institutions own 25% of IOI Corporation Berhad

Every investor in IOI Corporation Berhad (KLSE:IOICORP) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 53% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And institutions on the other hand have a 25% ownership in the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones.

In the chart below, we zoom in on the different ownership groups of IOI Corporation Berhad.

View our latest analysis for IOI Corporation Berhad

What Does The Institutional Ownership Tell Us About IOI Corporation 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.

As you can see, institutional investors have a fair amount of stake in IOI Corporation Berhad. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 IOI Corporation Berhad's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in IOI Corporation Berhad. Our data shows that Progressive Holdings Sdn. Bhd. is the largest shareholder with 50% of shares outstanding. This implies that they have majority interest control of the future of the company. Employees Provident Fund of Malaysia is the second largest shareholder owning 12% of common stock, and Permodalan Nasional Berhad holds about 7.9% 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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of IOI Corporation Berhad

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 most recent data indicates that insiders own less than 1% of IOI Corporation Berhad. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own RM117m worth of shares. 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 14% ownership, the general public, mostly comprising of individual investors, have some degree of sway over IOI Corporation Berhad. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 53%, 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand IOI Corporation Berhad better, we need to consider many other factors. For instance, we've identified 1 warning sign for IOI Corporation Berhad that you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.