United Bank for Africa (UBA) Plc on Thursday announced that one of its executive directors purchased total shares of 3,000,000 between July 15, 2020.
This was disclosed in a statement signed by Bili A. Odum, Company Secretary, United Bank for Africa Plc and released on the Nigerian Stock Exchange’s website. The bank said Ayoku Liadi, an Executive Director of the company, bought 3,000,000 shares at N6.05 a unit through the Nigerian Stock Exchange.
Ayoku Liadi was the Managing Director, Guaranty Trust Bank, Sierra Leone Limited where he led the bank to win the most profitable bank in Sierra Leone in 2013, as well as Financial Institution of the year in 2013, and The Most Customer-Focused Bank Award in 2012 by KPMG. He also had a stint at Zenith Bank and rose to the position of Deputy General Manager in 2006.
Similarly, Tony Elumelu, Chairman of the Bank, purchased a total of 71,823,300 Shares of the Bank, valued at N444,845,470.00 in the month of July.
For investors, one of the few indicators of a firm’s share price prospects lies in whether their directors “put their money where their mouths are” – that is, buy shares in the companies they oversee, even when all the news is doom and gloom and the shares are sliding in price.
In buying shares in their own firms, they are signalling they have confidence in the company’s future – and that the share price they are buying at represents good value.
Although some of this buying may be an attempt by bosses to instil confidence in their firm’s shares, it can also be read as a signal that share prices are close to bottoming out and represent a buying opportunity for brave investors.