Institutional Owneeship Data (Under the Radar)
GM,
<< No-ne every institution-na reports-ni to USA-no-ha-ko-ka?? >>
That is a fact. What follows here is part of a dialogue I recently had with R99, a Finn, on the TMF Nokia board:
<< I'd expect the largest American institutions to trade in addition to NYSE also in Helsinki. The daily volume is considerably higher and the market is open when the most important company specific news come out. >>
So would I, and as multinationals they of course do, and for the reasons you state, and I would also expect their holdings and those of many other major institutions and their subsidiaries listed and doing business in the US (like AMVESCAP, CSFB, Deutsche Bank, UBS) to be reported to the SEC on forms 13D, 13G, 14d-1, 13F, n30-d and "voluntary filings." In the case of the Deutsche Bank Group e.g., Deutsche Asset Management (Japan) Ltd, DeAM (London), as well as Deutsche Bank Alex. Brown, and Deutsche Bankers Trust (New York) are all institutional owners of Nokia.
My recall is that on any given day 60 to 80% of volume on HEX is NOK1V and that upwards of 90% of that volume or total volume on the exchange is institutional.
Volumes of Nokia Shares Traded in Exchanges:
nokia.com
<< I'd go one step further and say I doubt they even include the ordinary shares (not ADR's) held by American institutions. >>
I don't think that is the case, but I am honestly not sure about that. With absolute certainty I can tell you that if any institution exceeds 5% ownership of a combination of ADRs and common in Nokia as Janus Capital once did they darned well better report it to the SEC and best Nokia does as well as they have in the past:
press.nokia.com
I'm sure that there are institutions holding Nokia common shares or ADRs that are flying under the radar of the institutional ownership data miners (FactSet LionShares, Computershare who feeds MSN and Reuters, Vickers who feeds Yahoo) and the number of those shares could be considerable. However, as investors we make do with what we have access to.
This is how FactSet LionShares gathers data:
For securities traded on major U.S. exchanges, such as the NYSE, Nasdaq and AMEX, FactSet LionShares gathers institutional ownership information via 13F filings as well as by “rolling up” the sum of shares held by the mutual funds managed by a particular institution. FactSet LionShares also uses the rolling up method to gather ownership data for securities that are not traded on major U.S. exchanges (i.e. ordinary shares for foreign countries). Insider/declarable stakes data is collected via 13D/13G/Canadian early warning reports, registration forms, proxy reports, Insider filings (Forms 3, 4, and 5), public company annual reports and interim financial statements. Additionally, the FactSet LionShares data collection center in France facilitates the collection of share ownership data from non-North American domiciled holders via European/offshore mutual funds and insider / declarable stakes driven sources, such as stock exchange announcement/data feeds, proxies and annual reports.
<< I guess these can be used as a proof that the American "institutional ownership" figures are of limited value with ADR: (Example case Stora-Enso Corp) >>
I could be entirely wrong but I would be willing to bet you a bottle of good sipping vodka <g> -- make mine Wodka Wyborowa, please, and I prefer mine chilled rather than pocket warmed <ggg> -- that Rick Simonson and Ulla James would disagree with you vehemently and at the very least they could expand on the significance of the metric [see the article below which has an interesting stat - i.e. that 1.5 mn of Nokia's 2 mn global investors reside in the US].
Also IMO, you might want to pick a considerably cleaner and less complicated (for lack of better words) example case than Stora-Enso Corp (SEO) and its listing of major shareholders as of 29 April 2005 to illustrate a disparity with data mined by the Vickers Data Base (for Yahoo) which originates from SEC forms 13D, 13G, 14d-1, 13F, n30-d and "voluntary filings". When you start getting into a company like Stora-Enso with A shares and R shares each of which has different voting privileges for each, two +5% owners (the Finnish State and a foundation that is part of the "Wallenberg sphere") recent conversion of a large number of A shares to R shares just recorded in the Finnish trade register today, and the conversion of share options from an acquisition (Consolidated Papers) to the companies R shares, you have one darned complicated example.
[I'll wander here for a bit, but after doing considerable due diligence on Ericsson AB (ERICY) several years ago, near its low in this decade, I decided to pass on what turned out to be an exceptional buying opportunity - arguably the best large cap opportunity that has presented itself in wireless sector in this decade. They account in the Kroner (which I can't covert roughly in my head), they were involved at that time in a major reorganization and bloodletting, a reverse ADR was on the table, etc. Most of all however, the different share classes and voting privileges attendant and control of the company by a single family (the Wallenberg's) threw me and so I passed.]
Nokia's nice and simple by comparison. 1 common share equals 1 ADR and 1 vote and these are Nokia largest shareholders registered in Finland at year end according to Nokia in 2004:
Shares (000) % all shares/votes
============ ==================
Svenska Litteratursällskapet Finland 20,611 0.44%
Sigrid Jusélius Foundation 15,500 0.33%
BNP Arbitrage 15,316 0.33%
Ilmarinen Mutual Pension Insurance 10,787 0.23%
Varma Mutual Pension Insurance Company 8,000 0.17%
The State Pension Fund 7,900 0.17%
The Local Gov't Pensions Institution 7,480 0.16%
tinyurl.com
[they are, btw, under the radar of Computershares data feed to Reuters]
... now back to Ulla. The following is excerpted from a very interesting infomercial titled "Do Non-US companies Really Need the US Capital Market?" in IR Magazine published 10 months ago and sponsored by Citigroup Depositary Receipt Services which states that the US equities market is estimated to be worth a staggering $12 tn, or 38 percent of the market cap of the world’s major exchanges [and] Total US investment in non-US equities has steadily increased over time, rising from $279 bn in 1991 to $1.9 tn in 2003.
When IRO Ulla James tells acquaintances in Europe she works for Nokia, they invariably start talking about phones. In the US, on the other hand, James finds that a casual mention of Nokia immediately sparks a conversation about the company’s high-profile stock. ‘[Americans] talk about Nokia’s stock because of its visibility,’ says James. ‘We’re the most actively traded [ADR] share on the NYSE, and that gets broadcast on a daily basis on CNN and CNBC and so on. The visibility in the market enhances the Nokia brand presence very strongly.’ She points out that Nokia has a large retail following in the US, where 1.5 mn of its 2 mn global investors reside. James is convinced Nokia’s US listing has dramatically impacted the stock’s valuation. She points out that when Nokia first listed on the NYSE in 1994, the company’s market cap was $5 bn compared with $65 bn today. ‘Without a vast increase in foreign ownership, we would not have been able to achieve that type of valuation from our domestic stock exchange,’ she says. Americans now own 45 percent of Nokia’s stock (another 45 percent is owned by Europeans outside Finland and 10 percent is owned by domestic market investors). One way Nokia has impressed US investors is by establishing a very sophisticated IR effort with offices in the US and Helsinki. In June, the American IR department relocated from Dallas to New York, where Nokia’s CFO is now also based. The Finnish and American IR staff acts as ‘one virtual team,’ says James, noting that ‘as an investor, one wouldn’t have to even be aware where these individuals are located.’ Having an exceptionally well-run IR function helps the ADR, but the company has also benefited directly from its ADR’s reputation, which has almost certainly contributed to sales of Nokia’s underlying product. ‘The promised land of the consumer brand’ is what James dubs the US. ‘People know Nokia’s name from the equity market. They don’t just know Nokia phones,’ she says. ‘There’s a synergy. It’s always easier to start talking to investors when you have a product that they understand and know. And I think we’ve sold more Nokia phones in the US thanks to our listing on the NYSE.’ Once an ADR program gets off the ground, it’s often impossible ‘to separate out’ the various sources of the company’s consumer and investment success. ‘It’s a virtuous cycle,’ observes James. ‘One improves the other, and our overall visibility is certainly enhanced by our presence in the US equities market.’
citibank.com
Perhaps the next time one of us meets Ulla or Rick we can drill down on this further ... <g>
Best,
-Eric - |
