As Stocks Nosedive in 2016, Co Insiders Mop Up Shares
Promoters or top officials buy shares of their companies, it could mean that the shares are going cheap, or that they see a bright future
Mumbai: The fall in stock prices in the first two months of 2016 encouraged company insiders — promoters and top executives — to mop up shares of firms they own or work in, according to an ET study of BSE-listed companies. The ratio of insider buying to selling picked up to 1.33 times in January-March compared to 0.56 during the April-December 2015 period and 1.11 in FY14-15.
Piramal Enterprises, Adani Power, Bharti Airtel, Kansai Nerolac, Grasim, HDFC Bank and Axis Bank were among the stocks that saw insiders buying in a big way. Meanwhile, insiders sold Pipavav Defence, United Breweries, ITC, Unitech, Intrasoft Technologies and KSK Energy Ventures.
The BSE Sensex fell nearly 12% in January and February this year before recovering about 10% in March. The BSE Midcap and Smallcap indexes too, fell 14% and 19% between January and February before recovering 10% each in March.
Whenpromotersortopofficialsbuy sharesof their companies, it could be interpreted in different ways. It could mean that these shares are going cheap, or that they see a bright future. Some promoters buy to reverse the declining share prices.