Institutions profited after S P Setia Berhad's (KLSE:SPSETIA) market cap rose RM259m last week but sovereign wealth funds profited the most

Key Insights

• The considerable ownership by sovereign wealth funds in S P Setia Berhad indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is Permodalan Nasional Berhad with a 57% stake
• Institutional ownership in S P Setia Berhad is 22%

If you want to know who really controls S P Setia Berhad (KLSE:SPSETIA), then you'll have to look at the makeup of its share registry. We can see that sovereign wealth funds own the lion's share in the company with 56% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While sovereign wealth funds were the group that benefitted the most from last week’s RM259m market cap gain, institutions too had a 22% share in those profits.

Let's take a closer look to see what the different types of shareholders can tell us about S P Setia Berhad.

See our latest analysis for S P Setia Berhad

What Does The Institutional Ownership Tell Us About S P Setia 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 S P Setia 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 S P Setia Berhad's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in S P Setia Berhad. Permodalan Nasional Berhad is currently the largest shareholder, with 57% of shares outstanding. This implies that they have majority interest control of the future of the company. In comparison, the second and third largest shareholders hold about 9.5% and 4.5% of the 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of S P Setia 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.

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 S P Setia Berhad insiders own under 1% of the company. It seems the board members have no more than RM11m worth of shares in the RM4.0b company. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 20% stake in S P Setia 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for S P Setia Berhad (of which 1 doesn't sit too well with us!) 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.