Share-buying bosses raise hopes

STOCK markets are crashing. Investors are wisely sitting on the sidelines. But one significant group of share buyers has started to emerge over the past few weeks - directors of many of the bombed-out companies.

Buying by directors has always been seen as an encouraging sign by the stock market. The one group of people who best know the value of a business are the men and women who sit on the board and appreciate the true underlying worth of their company's shares.

So, as many share prices have fallen to bargain basement levels, there has been a steady increase in director buying. Just as important, the number of directors selling stock has declined - but that may be because they are reluctant to take a thumping loss.

Mike Tindale who runs www.directorsdeals, which monitors share activity by directors, identified an increase in buying particularly when the FTSE 100 was around 4600 (it is now 4297). 'There has been far greater share buying than selling, but there is some evidence that directors are waiting to see what happens next.'

Directors taking advantage of depressed prices far outnumber those bailing out. Tindale's figures show 65 directors bought shares in the first three days this week, while eight sold. Last week, 99 bought shares while 15 sold. Two weeks ago, 144 directors purchased shares, while just 17 sold. Among latest buyers is Clara Furse, chief executive of the London Stock Exchange, who spent £348,000 on a block of 100,000 at 348p. Another director, Ian Salter, bought 3,400 at 357p. They peaked at 489p on bid hopes.