UK company directors are buying shares in their own companies in larger numbers than at any time sin...
UK company directors are buying shares in their own companies in larger numbers than at any time since the 1998 Asian crisis, according to data produced by Artemis, writes David Griffiths.
Company director share purchase patterns have traditionally been a reliable indicator as to the true state of the economy.
The data shows that at the height of the Asian crisis, when most investors were scrambling to reduce their equity holdings, company directors were, on aggregate, buying shares in their own companies en masse. For every one company director that was selling shares in his company, 20 were buying.
The research shows that at present, for every company director selling shares in his own company, seven are purchasing. While not on the same scale as 1998, the figures illustrate a clear trend.
'Company director stock purchase patterns are an excellent barometer,' said Artemis' UK Smaller Companies fund manager Derek Stuart. 'What these figures are telling us is that perhaps we should be looking much more positively at the market.
'Quite often directors will have a much better feel for what's going on in their companies, the state of their order books and so on, than the City will.'
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