Institutions own 33% of Kuala Lumpur Kepong Berhad (KLSE:KLK) shares but public companies control 48% of the company

Key Insights

• Significant control over Kuala Lumpur Kepong Berhad by public companies implies that the general public has more power to influence management and governance-related decisions
• The top 2 shareholders own 64% of the company
• Institutions own 33% of Kuala Lumpur Kepong Berhad

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If you want to know who really controls Kuala Lumpur Kepong Berhad (KLSE:KLK), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are public companies with 48% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And institutions on the other hand have a 33% ownership in the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.

Let's delve deeper into each type of owner of Kuala Lumpur Kepong Berhad, beginning with the chart below.

View our latest analysis for Kuala Lumpur Kepong Berhad

What Does The Institutional Ownership Tell Us About Kuala Lumpur Kepong Berhad?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Kuala Lumpur Kepong Berhad. 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. 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 Kuala Lumpur Kepong Berhad's earnings history below. Of course, the future is what really matters.

Kuala Lumpur Kepong Berhad is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Batu Kawan Berhad with 48% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 16% and 4.0%, of the shares outstanding, respectively.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 64% stake.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Kuala Lumpur Kepong 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.

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 information suggests that Kuala Lumpur Kepong Berhad insiders own under 1% of the company. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own RM119m 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

The general public, who are usually individual investors, hold a 15% stake in Kuala Lumpur Kepong Berhad. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Public Company Ownership

We can see that public companies hold 48% of the Kuala Lumpur Kepong Berhad shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Kuala Lumpur Kepong Berhad better, we need to consider many other factors. For example, we've discovered 2 warning signs for Kuala Lumpur Kepong Berhad that you should be aware of before investing here.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.