Singapore Telecommunications Limited’s (SGX:Z74) largest shareholders are private equity firms with 51% ownership, individual investors own 29%

Key Insights

• Significant control over Singapore Telecommunications by private equity firms implies that the general public has more power to influence management and governance-related decisions
• The largest shareholder of the company is Temasek Holdings (Private) Limited with a 51% stake
• Institutional ownership in Singapore Telecommunications is 19%

If you want to know who really controls Singapore Telecommunications Limited (SGX:Z74), 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 51% to be precise, is private equity firms. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Meanwhile, individual investors make up 29% of the company’s shareholders.

Let’s delve deeper into each type of owner of Singapore Telecommunications, beginning with the chart below.

See our latest analysis for Singapore Telecommunications

What Does The Institutional Ownership Tell Us About Singapore Telecommunications?

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 Singapore Telecommunications. 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. 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 Singapore Telecommunications, (below). Of course, keep in mind that there are other factors to consider, too.

Singapore Telecommunications is not owned by hedge funds. Temasek Holdings (Private) Limited is currently the largest shareholder, with 51% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. In comparison, the second and third largest shareholders hold about 4.7% and 3.3% of the stock.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Singapore Telecommunications

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.

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 Singapore Telecommunications Limited. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own S$7.0m of stock. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

The general public– including retail investors — own 29% stake in the company, and hence can’t easily be ignored. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 51% stake in Singapore Telecommunications. This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

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. Consider for instance, the ever-present spectre of investment risk. We’ve identified 3 warning signs with Singapore Telecommunications (at least 1 which is a bit unpleasant) , and understanding them should be part of your investment process.

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.

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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.