Sunday, September 30, 2012

Insider movement: Its significance

One of the fewer things which I seldom mention but is important are the movement of substantial shareholders or to some it is being referred to as insiders. Why is it called insiders? These are either management, owners, directors of the companies themselves who do the trades. Any shareholders who hold more than 5% are supposed to make announcements of their actions to Bursa as well. These personnel are important as they are the ones who know their companies better than anyone.

I have been looking at insiders for years and this is one of the things I learn from the market. Some owners do not really hide their holdings while some (many) of course do not do the trades using their names. They use nominees and these are the ones which we are not able to detect.

Sometimes, these owners would like us to know of their trades so that we follow. Hence, it is important that we are not "screwed" by these trades. Hence, do not be fooled. There are some who are genuine as they feel that their share price could be cheap / expensive, hence their actions show what they perceive.

Of course, sometimes the insiders (especially the weaker companies) shares are being force sold. One of the articles which I have written on where the shares are being sold (perhaps force sold) was MTouche.

One of the major parties who trades on a daily basis and reporting on its trades is our own EPF. Its trades are important as well, due to the size of the fund that EPF controls, We do not want to buy especially when EPF is reducing its holdings on certain counters, vice versa. Of course, just like the insiders, EPF do sometimes disguises on its trades buying and selling the same company on the same day or period. It is important obviously for EPF, from the investment public point of view to not know what its intentions are.

Anyway, due to the significance of the substantial shareholders movement, I feel that it is important for me to highlight them in a separate tab. Updates would be done regularly. I would only update the significant ones. Small trades would not be touched as they are not significant. So are the ones which I think do not bring value to this blog (or for the readers). Hence, I would only pick the important ones. For example, shares being given to their love ones, bonus issues, rights issues would most of the time not be touched.

Purchases / sale can also be done by the holding company, but I may just highlight the important personnel. For example, trades done by Tan Sri Lee Shin Cheng's holding company would also involve his family members, but I would only highlight his name.

Do check out the insider trades occasionally on the separate tab next to "Position". During the course of collecting the data, I may make mistakes - hence, do not blame me - of course, I would hope to be as accurate as possible.


graph cut said...

Totally agree with your posting.

Recently, i noticed that KLCCP price continue to move higher eventhough EPF is disposing its stake.

Something great is going to happen.

Need your advice.

felicity said...

KLCCP's shares has been on the rise because nowadays investors like dividend type stock. As I know there is a high chance of KLCCP to go towards the REITs route. I think that's why it has been on the up.