In crises, top managers usually scent bargains and entry prices while the stock markets are still tumbling down. Not so at the moment: Even company insiders keep their hands off their company's share certificates. Only a few CEOs are exceptions.
Management and supervisory boards have only bought a few shares in their own companies for months, as the "Handelsblatt" reports. The company insiders therefore bought a remarkably low number of shares in August - as in June and July. "Insiders obviously don't trust the roast and expect a further decline in the economy - and the stock markets," Olaf Stotz, professor at the Frankfurt School of Finance, is quoted as saying
Stotz also sees the reluctance as a warning signal because during other crises top managers always very quickly sensed bargains and entry-level prices while the stock markets were still rushing down: "It was like that in the financial crisis, in the euro crisis, in the Corona crisis and also shortly after the start of the Ukraine war." But currently the insiders apparently see more fundamental and long-term problems with regard to the development of the economy and the profits of their companies. Stotz has been following the stock buying and selling of company insiders for nearly 20 years, according to the report.
Equity strategists at banks therefore share the skepticism of insiders. Strategists at the fund company DWS, for example, are cautious with regard to profit expectations. One reason: the full effects of interest rate hikes would "only slowly become visible in the growth rates of the major economies and in corporate profits".
According to the "Handelsblatt", the CEOs still grabbed the papers of the three DAX companies Bayer, Fresenius and Symrise. Bayer boss Werner Baumann, who put Bayer shares in his own portfolio for 1.6 million euros, bought the most. Board member Stefan Oelrich also struck for a good 160,000 euros. Bayer recently raised its profit forecast for the current year.
With an increase of 11 percent, the Bayer share is one of the few DAX winners this year, but has lost more than 20 percent since the end of May. Thus, the board members' purchases fit the picture of anti-cyclical insiders who believe in their company and buy when prices fall.
