Insider Trades shows the trades made by substantial shareholders or directors of the company. Company buying back its own share is also recorded here.
Purchases by the directors and company share buyback may indicate the share price is undervalued and brings confidence to the price trend of the share price. A substantial shareholder selling consistently without a good reason may be a potential sign of trouble.
We do see substantial shareholders or Directors/CEO of listed companies buying or selling the shares of a company through the announcements made on the SGX portal. Companies make these announcements in order to comply with those listing rules which are designed to ensure transparency in the shares dealings of these groups of shareholders. CEOs and Directors by virtue of their appointments are expected to be informed about the operating performance and strategic plans of their companies, while substantial shareholders by virtue of their substantial holdings are potential market movers when they buy or sell their shares. There are many lawful (i.e. not breaching Insider Trading laws under the Securities & Futures Act) reasons why these parties will buy or sell their shares.
|Possible reasons for disclosing parties to buy||Possible reasons for disclosing parties to sell|
|Share price is under-valued||Share price is over-valued|
|Assessed outlook of the company is optimistic||Assessed outlook of the company is pessimistic|
|Portfolio rebalancing - under-exposure (company/sector/country)||Portfolio rebalancing - over-exposure (company/sector/country)|
|Personal reasons (especially for individuals): e.g. has surplus cash to invest||Personal reasons (especially for individuals): e.g. need to raise cash for use or to cover a cash deficit|
|Portfolio building when a Fund is started||Portfolio liquidation when a Fund is terminated or to cover fund redemptions|
|Substantial shareholder acquiring shares in advance of an Offer (e.g. triggering a General Offer or privatization)|
We should note that CEO/Directors' shares dealings disclosure obligations are irrespective of the size of their shareholdings as officers of the company, while for substantial shareholders, disclosure is required once they have crossed the 5% threshold that define them as substantial shareholders. For the former, the significance of their shares dealings arises from a presumption of possession of information (as officers of the company), while for the latter, the significance arises from their potential to move the market with their trades. And then, there are CEOs/Directors who are themselves substantial shareholders as well and their moves assume even greater significance.
The Insider Trades feature in ShareInvestor WebPro and Station collects and displays all the latest insider trades by calendar month or by company ("Select Counter" filter) for SGX and Bursa markets. Details provided include the names of the Buyer/Seller, Classification (SSH/DIR/CEO), types of Security involved, quantity bought/sold (broken up by Direct/Deemed), price (transacted), price (closing), post-transaction ownership (no. of shares/%) and additional notes. When Insider Trades of a company is selected, the current and historical transactions allow trends and patterns of insider trades by SSH or DIR/CEO to be analyzed.
In summary, the Insider Trades feature allows us to: