Sovereign wealth funds who hold 51% of S P Setia Berhad (KLSE:SPSETIA) gained 4.5%, institutions profited as well

Key Insights

• Significant control over S P Setia Berhad by sovereign wealth funds implies that the general public has more power to influence management and governance-related decisions
• 51% of the company is held by a single shareholder (Permodalan Nasional Berhad)
• Institutions own 30% of S P Setia Berhad

Every investor in S P Setia Berhad (KLSE:SPSETIA) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are sovereign wealth funds with 51% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 4.5% increase in the stock price last week, sovereign wealth funds profited the most, but institutions who own 30% stock also stood to gain from the increase.

Let's delve deeper into each type of owner of S P Setia Berhad, beginning with the chart below.

View our latest analysis for S P Setia Berhad

What Does The Institutional Ownership Tell Us About S P Setia 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.

S P Setia Berhad already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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.

We note that hedge funds don't have a meaningful investment in S P Setia Berhad. Permodalan Nasional Berhad is currently the largest shareholder, with 51% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. For context, the second largest shareholder holds about 9.1% of the shares outstanding, followed by an ownership of 8.0% by the third-largest shareholder.

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that S P Setia 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 RM881k worth of shares. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 18% stake in S P Setia Berhad. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand S P Setia Berhad better, we need to consider many other factors. For instance, we've identified 2 warning signs for S P Setia Berhad (1 can't be ignored) 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.