Key Insights
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Given the large stake in the stock by institutions, RHB Bank Berhad's stock price might be vulnerable to their trading decisions
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The top 3 shareholders own 57% of the company
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Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock
If you want to know who really controls RHB Bank Berhad ( KLSE:RHBBANK ), then you'll have to look at the makeup of its share registry. We can see that institutions own the lion's share in the company with 75% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And last week, institutional investors ended up benefitting the most after the company hit RM33b in market cap. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 26%.
Let's delve deeper into each type of owner of RHB Bank Berhad, beginning with the chart below.
See our latest analysis for RHB Bank Berhad
What Does The Institutional Ownership Tell Us About RHB Bank 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.
RHB Bank Berhad already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 RHB Bank Berhad's earnings history below. Of course, the future is what really matters.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Hedge funds don't have many shares in RHB Bank Berhad. Employees Provident Fund of Malaysia is currently the largest shareholder, with 38% of shares outstanding. OSK International Asset Management Sdn Bhd is the second largest shareholder owning 10% of common stock, and Permodalan Nasional Berhad holds about 8.4% of the company stock.
To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.
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 RHB Bank 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 RHB Bank Berhad insiders own under 1% of the company. As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own RM2.0m worth of shares. Arguably recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 24% stake in RHB Bank 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.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 1 warning sign for RHB Bank 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 .
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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.
