December 5, 2020

The coronavirus stock market crash multiplies by 44 the investment in shares of directors and managers



The directors and executives of fifty Spanish listed companies multiplied the purchase of shares in March 2020, with stock markets around the world registering historical falls due to the economic shock derived from the coronavirus health emergency.

Until last Friday, the heads of 52 listed companies (directors in their personal capacity or on behalf of shareholders, as well as managers and people closely related to them) had notified the National Securities Market Commission (CNMV) of more than 280 purchase of securities made between March 1 and 26 for an overall amount of about 88.9 million euros.

This investment figure is provisional and will surely increase by the end of March, as there are operations that are more than a week late. The calculation takes into account operations reported in 52 companies that are listed on the Continuous Market (17 are from the Ibex 35, the main Spanish stock index) and does not include the shares delivered to managers and directors for participating in multi-year remuneration plans. Neither are SMEs listed on the alternative stock market (MAB) taken into account.

The securities acquisition operations have grown exponentially compared to March 2019, both in number of purchases and in the amount of the total investment made. The amount of the shares acquired this month has multiplied by more than 44. In all of March 2019, the total investment narrowly exceeded 2 million euros compared to the almost 89 million registered now.

Regarding the number of reported operations, in March 2019 there were only 47 purchases of securities (including 10 corresponding to the collection of dividends in shares), which is six times less than in the first 25 days of March 2020, according to data compiled of the records of the CNMV.

Stock purchases focus on stock market declines

Evolution of the investment of directors and directors of listed companies and the General Index of the Madrid Stock Exchange in March

Source: CNMV

Of the almost 89 million invested by the administrators and directors of those listed between March 1 and 25, almost 60% (about 52.6 million) were concentrated in the week of March 9 to 13, with a total of 103 operations.

That week was the second worst in the history of the Ibex, with a drop of 20.8%, only higher than the collapse it suffered in 2008, after the bankruptcy of the American investment bank Lehman Brothers. Stock market bleeding, which only slowed after the billionaire public and private debt purchase plan announced by the European Central Bank, forced the CNMV to ban short bets (speculate with the possible fall of titles resorting to the loan of shares) after suffering the Ibex on March 12 the biggest fall in its history: more than 14%.

This is precisely the day that concentrates the largest number of purchases of securities by executives and directors of the Spanish listed companies, with 30 operations for an amount of more than 27 million euros.

By companies, the most relevant investment corresponds to Telefónica, whose independent director Francisco Riberas (in turn executive president of the automotive group Gestamp) invested more than 20 million in securities of the operator on Thursday March 12 through one of its companies . Between that day and Monday the 16th, the Riberas also bought another 10.9 million in titles from the automotive group they control.

Gestamp owners are among the great fortunes who have used this month to allocate millionaire investments to the stock market hoping for a rebound in prices.

Other billionaires who have opted to strengthen their companies are the March family, with 13.6 million invested throughout the month in securities of the Alba Finance Corporation, its holding company; the Mexican Carlos Fernández, the main shareholder of Amrest (La Tagliatella restaurants), with 3.8 million; or Bankinter’s largest shareholder, Jaime Botín, with 4.3 million invested in the bank through his company Cartival on March 13, the same day that the entity’s first executive, María Dolores Dancausa, invested nearly 300,000 euros in bank shares.

Other relevant investments are the 1.8 million invested by the Hernández Callejas family in Ebro Puleva, and the 4.3 million that the Egaña family, reference shareholders of the CIE automotive group, have allocated to the purchase of securities acquired between 23 and on March 25.

Among the operations of executives, the 3.65 million invested by the president of GAM, Pedro Luis Fernández, stand out, to become the second shareholder of the machinery rental group after acquiring 5% of its capital; and the 4.82 million acquired in IAG titles by airline group executives at the beginning of March, at prices much higher than the current ones.

The most relevant operation corresponds to the president of Vueling, Javier Sánchez-Prieto, who invested 3.2 million on March 11 at a price of 4.68 euros, compared to 2.38 euros at which the owner of Iberia and British Airways last Friday. Like the rest of the airlines, IAG is suffering a harsh punishment after the closure of the decreed airspace to try to stop the expansion of the coronavirus.

The managers of the Merlin Properties socimi have also been very active, in whose capital the gaming businessman Manuel Lao, ex-owner of Cirsa, has just broken into. Directors and executives of the real estate agency have reported the acquisition of 2.68 million in securities in 41 operations carried out between March 4 and 24. The most active have been Merlin’s executive president, Ismael Clemente, with 667,900 euros, and the other executive director, Miguel Ollero with 721,400 euros.

These are operations carried out in the days before, last Wednesday, the Community of Madrid definitively approve Operation Chamartín, of which Merlin is one of the partners. At the moment, and after the new 3.63% bump that the Ibex suffered on Friday, its investment is in handicaps.

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