Private companies account for 53% of IOI Corporation Berhad's (KLSE:IOICORP) ownership, while institutions account for 34%

Key Insights

• IOI Corporation Berhad's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 50% of the company is held by a single shareholder (Progressive Holdings Sdn. Bhd.)
• Institutional ownership in IOI Corporation Berhad is 34%

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To get a sense of who is truly in control of IOI Corporation Berhad (KLSE:IOICORP), it is important to understand the ownership structure of the business. 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.

Institutions, on the other hand, account for 34% of the company's stockholders. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.

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?

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 IOI Corporation Berhad does have institutional investors; and they hold a good portion of the company's stock. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see IOI Corporation Berhad's historic earnings and revenue below, but keep in mind there's always more to the story.

IOI Corporation Berhad is not owned by hedge funds. 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. With 14% and 7.9% of the shares outstanding respectively, Employees Provident Fund of Malaysia and Permodalan Nasional Berhad are the second and third largest shareholders.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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

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. 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.

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 information suggests that IOI Corporation Berhad insiders own under 1% of the company. 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 RM177m 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 12% ownership, the general public, mostly comprising of individual investors, have some degree of sway over IOI Corporation 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.

Private Company Ownership

We can see that Private Companies own 53%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 1 warning sign for IOI Corporation Berhad that you should be aware of.

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.