Bosses scramble to sell shares

RECORD amounts of shares are being sold by Britain's directors in the companies they run, according to an analysis by the Evening Standard.

A flood of board members have bailed out since coming back from their summer holidays, apparently anxious to realise profits in case the share market rally fizzles out.

Among listed company directors, share disposals outnumbered purchases by seven to one in the first two weeks of September.

While net sales amounted to just £4.3m in the whole of August, the figure for September has ballooned already to £24m after just 10 days, suggesting we are heading for the worst month this year for disposals.

Directors in the FTSE 350 - the 350 biggest listed companies in Britain - sold £27.4m worth of shares in their own companies but bought just £3.4m worth.

The stampede for the exit by some directors contrasts with a flood of small investors tentatively returning to the stock market.

Jeremy Batstone of stockbrokers Fyshe Group, who is advising investors to steer clear of cyclical stocks and return to more defensive investments, said: 'There is a clear juxtaposition there.'

Deals by directors are closely watched because they inevitably know more about the firms they run than outside investors. Selling by a director is often regarded as a warning signal, though the numbers are difficult to interpret because of strict rules on the timing of directors' deals.

American directors have also been aggressive sellers recently, sounding warning signals on Wall Street.

In Britain the sellers have included some high-profile cases, including housebuilding entrepreneur Tony Pidgeley, who sold nearly £9m of Berkeley Group shares.

Richard Nelson, chief executive of Intertek, the product testing company, pocketed £7.7m. The figures may understate the true scale of the boardroom bailout. Outside the FTSE 350, recent big sellers include Will Hobhouse of Whittard of Chelsea, who sold £1.3m of stock, and Martin Finegold of Kensington Group, who ditched £3.3m.

Directors have been net buyers of shares in only January and April. July was the biggest month for net disposals with directors in the FTSE 350 selling a net £37m of stock.