Institutions own 28% of Alliance Bank Malaysia Berhad (KLSE:ABMB) shares but private companies control 44% of the company

Key Insights

• Alliance Bank Malaysia Berhad's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public

• A total of 5 investors have a majority stake in the company with 53% ownership

• 28% of Alliance Bank Malaysia Berhad is held by Institutions

A look at the shareholders of Alliance Bank Malaysia Berhad (KLSE:ABMB) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 44% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Meanwhile, institutions make up 28% of the company’s shareholders. 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 Alliance Bank Malaysia Berhad, beginning with the chart below.

See our latest analysis for Alliance Bank Malaysia Berhad

What Does The Institutional Ownership Tell Us About Alliance Bank Malaysia 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.

We can see that Alliance Bank Malaysia Berhad does have institutional investors; and they hold a good portion of the company's stock. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Alliance Bank Malaysia Berhad's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Alliance Bank Malaysia Berhad. Our data shows that Vertical Theme Sdn. Bhd. is the largest shareholder with 29% of shares outstanding. With 10% and 5.0% of the shares outstanding respectively, Employees Provident Fund of Malaysia and Global Success Network Sdn Bhd are the second and third largest shareholders.

Our research also brought to light the fact that roughly 53% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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 Alliance Bank Malaysia 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.

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 most recent data indicates that insiders own less than 1% of Alliance Bank Malaysia Berhad. However, it's possible that insiders might have an indirect interest through a more complex structure. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own RM2.3m 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-- including retail investors -- own 28% 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.

Private Company Ownership

It seems that Private Companies own 44%, of the Alliance Bank Malaysia Berhad stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Alliance Bank Malaysia Berhad better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Alliance Bank Malaysia Berhad you should be aware of.

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.