Saudi Awwal Bank's (TADAWUL:1060) market cap surged ر.س3.6b last week, individual investors who have a lot riding on the company were rewarded

SAB -1.39%

SAB

1060.SA

39.15

-1.39%

Key Insights

  • Significant control over Saudi Awwal Bank by individual investors implies that the general public has more power to influence management and governance-related decisions
  • A total of 2 investors have a majority stake in the company with 51% ownership
  • Institutional ownership in Saudi Awwal Bank is 26%

If you want to know who really controls Saudi Awwal Bank (TADAWUL:1060), 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 40% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, individual investors were the biggest beneficiaries of last week’s 4.9% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Saudi Awwal Bank.

See our latest analysis for Saudi Awwal Bank

ownership-breakdown
SASE:1060 Ownership Breakdown December 29th 2023

What Does The Institutional Ownership Tell Us About Saudi Awwal Bank?

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.

Saudi Awwal Bank 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. 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 Saudi Awwal Bank's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
SASE:1060 Earnings and Revenue Growth December 29th 2023

Saudi Awwal Bank is not owned by hedge funds. HSBC Holdings plc is currently the company's largest shareholder with 31% of shares outstanding. For context, the second largest shareholder holds about 20% of the shares outstanding, followed by an ownership of 2.5% by the third-largest shareholder. Mohammed Bin Omran Mohammed Al Omran, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Saudi Awwal Bank

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Shareholders would probably be interested to learn that insiders own shares in Saudi Awwal Bank. It is a very large company, and board members collectively own ر.س2.0b worth of shares (at current prices). we sometimes take an interest in whether they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 40% stake in Saudi Awwal Bank. 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.

Public Company Ownership

It appears to us that public companies own 31% of Saudi Awwal Bank. 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:

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 instance, we've identified 1 warning sign for Saudi Awwal Bank that you should be aware of.

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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