Significant control over Genting Malaysia Berhad by public companies implies that the general public has more power to influence management and governance-related decisions
51% of the business is held by the top 2 shareholders
If you want to know who really controls Genting Malaysia Berhad (KLSE:GENM), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 49% to be precise, is public companies. Put another way, the group faces the maximum upside potential (or downside risk).
And last week, public companies endured the biggest losses as the stock fell by 4.1%.
In the chart below, we zoom in on the different ownership groups of Genting Malaysia Berhad.
What Does The Institutional Ownership Tell Us About Genting Malaysia 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.
Genting Malaysia Berhad already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Genting Malaysia Berhad, (below). Of course, keep in mind that there are other factors to consider, too.
KLSE:GENM Earnings and Revenue Growth May 29th 2023
Genting Malaysia Berhad is not owned by hedge funds. Genting Berhad is currently the company's largest shareholder with 49% of shares outstanding. The second and third largest shareholders are AIA Investment Management Private Limited and The Vanguard Group, Inc., with an equal amount of shares to their name at 1.6%.
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 51% 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Genting Malaysia Berhad
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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 most recent data indicates that insiders own less than 1% of Genting Malaysia Berhad. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around RM33m worth of shares (at current prices). 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-- including retail investors -- own 34% stake in the company, and hence can't easily be ignored. 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 49% of the Genting Malaysia 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 Genting Malaysia Berhad better, we need to consider many other factors. For example, we've discovered 2 warning signs for Genting Malaysia Berhad (1 shouldn't be ignored!) that you should be aware of before investing here.
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.
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