Source of article: Business Times

Writing credits: Uma Devi

Directors buying shares in their company are signalling that they are confident of the prospects of the company – that they have skin in the game and are further committed to the company by increasing their personal stakes. Often, directors buy shares to support the share price and to shore up market confidence in the company if the shares are trading below their perceived fair market value.

Insiders buying shares must abide by the insider trading and other laws governing the integrity of the market. Directors must make timely and accurate disclosures of their share trades under the Singapore Securities and Futures Act (“SFA”).

Directors actively buying shares in the company could also be a sign that there is an impending general offer for the company – that the individual directors buying shares are possibly part of a consortium or group that is planning to launch a general offer to privatize the company.

Under the SFA, directors buying shares in the company do not contravene insider trading laws if the purchases are made before the directors in question and their concert parties launch a general offer for the company.

I shared my views with the Singapore Business Times published on 6 Jun 22 and on my LinkedIn here.