Why Ajoritsedere Awosika’s N57.9m splash in Access Bank should concern investors

The former Permanent Secretary in the Federal Ministries of Internal Affairs, Ajoritsedere Awosika, has acquired 7.10 million shares in Access Bank. Awosika splashed N57.9 million into the lender to confirm her position.

Awosika, who acts as the chairman of Access Bank purchased a total 7,109,104 ordinary shares of the creditor on the Nigerian Stock Exchange (NSE) on Tuesday, April 6, 2021.

The 68-year-old bought the 7.10 million shares at N8.15kobo per share as an inside dealer. The acquisition comes more than a year after her appointment.

Why Awosika’s recent purchase should concern investors

While selling of shares by an insider occurs for several reasons, inside dealing based on share acquisition, like that of Awosika, usually happens when the insider believes the share price value of their company will rise.

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The projection is usually for a longterm performance. Ripples Nigeria understands insider dealing activity is one of the factors that guide investment decisions of outside investors as the insiders have a better forecast knowledge of the company’s future value.

When insiders start selling off shares, then investors must trade with caution, as some of them usually have illegal and legal access to company materials not made public yet. Note that insiders range from a company’s management, staff, associates and family members.

Monitoring stock activities of persons with company knowledge is one of the oldest tip in beating the market. But as an investor, you need to know which insider to shadow, and the most effective are the executives, associates and their families.

Nevertheless, investors need to trade with caution when an insider is offloading or unloading their shares in the stock market.

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