OCBC reward its individual investors

TimothyBarnes
2022-03-14

A look at the shareholders of Oversea-Chinese Banking Corporation Limited$OVERSEA-CHINESE BANKING CORP(O39.SI)$  can tell us which group is most powerful. We can see that individual investors own the lion's share in the company with 55% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
As a result, individual investors collectively scored the highest last week as the company hit S$55b market cap following a 3.8% gain in the stock.


What Does The Institutional Ownership Tell Us About Oversea-Chinese Banking?


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.

As you can see, institutional investors have a fair amount of stake in Oversea-Chinese Banking. 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 Oversea-Chinese Banking, (below). Of course, keep in mind that there are other factors to consider, too.

Oversea-Chinese Banking is not owned by hedge funds. Selat (Pte) Limited is currently the company's largest shareholder with 14% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 4.4% and 3.5%, of the shares outstanding, respectively.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.



Insider Ownership Of Oversea-Chinese Banking


While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Oversea-Chinese Banking Corporation Limited. But they may have an indirect interest through a corporate structure that we haven't picked up on. 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 S$248m 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 55% of Oversea-Chinese Banking. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.



Private Company Ownership


We can see that Private Companies own 25%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

  • powerbert
    2022-03-15
    powerbert
    OCBC NAV is $11.43, now share price 11.70 is  cheaper than uob and Dbs. Dividend yield also higher.
  • Rachlim
    2022-03-15
    Rachlim
    Great stock to buy
  • Mylo
    2022-04-05
    Mylo
    Great
  • FK1234
    2022-03-18
    FK1234
    💪
  • PoofyMush
    2022-03-16
    PoofyMush
    sounds good
  • Gerrie
    2022-03-15
    Gerrie
    Very gd
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