thetimes.co.uk
MONDAY JULY 09 2001
Share selling by US directors reaches
record
BY CARL MORTISHED, INTERNATIONAL BUSINESS EDITOR
SHARE selling by directors of US companies has reached record
levels and the malaise among company insiders reveals a severe
lack of confidence that the American economy will recover this
autumn.
On the high-tech Nasdaq stock exchange, selling directors now
exceed buyers by a factor of five to one, the highest ratio recorded
by Argus Vickers, publisher of the Vickers Weekly Insider, a
closely watched survey of directors’ dealings.
The New York Stock Exchange is showing signs of a rout with
selling directors outnumbering buyers by six to one, the highest
level in 12 years, and evidence that boardroom gloom is spreading
from high-tech companies to the wider industrial sector.
According to Bijal Shah, markets analyst at SG, the investment
bank, the selling is widespread and in high volumes. “There has
been a belief that the downturn in spending would be temporary.
But directors are seeing no improvement in order books and they
are dumping their own shares even though the share prices are
already low.”
The Vickers statistics show some 1,800 directors and insiders
were sellers in the past week. According to Mr Shah, the sellers
over the past three months have included insiders among big
high-tech companies such as AOL, AMD and Microsoft.
However, the rout is extending to the wider industrial and financial
sectors with insider sales at Ford, Bank of New York and
MBNA.
Mr Shah worries that the world could be facing a repeat of the
early 1990s, when signs of a US recovery were extinguished by
weakness in Japan and Europe. “US companies have a problem.
The Fed has slowed down its rate-cutting and the European
Central Bank is proving reluctant to cut rates at all. We need some
easing of interest rate policy in Europe. The Japanese are not in a
position to help.”
KJC |
