Four share placements announced in the last few days have got me suspicious about the direction of the market as a whole. In question here is not so much the companies that announced they are raising funds, or what they are using the proceeds for. My question here is what can we deduce from the timing of their announcements about whether the market is at a top. Afterall, companies prefer to place shares when their share price is high, so they can raise more funds for the same number of shares issued, or that they can issue fewer shares to raise the same amount if the price was low. If the companies below believed their share price was going to rise further, wouldn't they wait before announcing share placements? Does the fact that they are announcing share placements now indicate their belief that their share price – and by extension, the market – aren't going to rise any further?

The companies in question are:

• China Lifestyle F&B Group. As we reported last Friday, they are raising S$25.8 mln to expand its production capacity in Tianjin. It is selling 70 mln new shares at S$0.38, a slight discount to the last traded price of S$0.41 in the Thursday session, before the stock was halted for trade. S$2.5 mln of the proceeds will be injected into its joint venture with Super Coffeemix Manufacturing. The new shares will dilute existing shareholders by 16.4%.
• China Sky Chemical Fibre is placing 18 mln shares at S$1.35, using 30%-40% of the proceeds to buy land in Fujian for future expansion. It's buying the land now because compensation payments to local farmers are going up.
• Soilbuild Group is raising S$6.5 mln through a private placement of 13.3 mln shares at S$0.49 each to fund the buying and re-developing Furama Towers, with the rest going to acquisitions and working capital.
• HG Metals isn't placing shares per se, but its special dividend will cover only half of the amount of money shareholders will have to cough up if they are to fully exercise rights to buy more shares.

I don't claim to have special insights into what these companies are thinking. I haven't asked them about what led them to go raise cash now. There is clearly some nervousness developing in the minds of management about how much further the rally will last. On the spectrum of 1 to 5, where 1 is the firm conviction that the market is going to crash, through to 5 where there is a firm conviction that the market is going to rally, we've clearly moved to a 3 or 4. In other words, through their actions they are not calling a top, but neither are they expecting the gains to continue in the same dramatic way as they have in the past few months.

Put yourself in the shoes of a CEO. You want to raise cash. You've been watching the market set one record high after another. You're wondering how much higher it's going to go. When are you going to pull the trigger? If you believe the market is going to keep rising to 3,000 and beyond, you'll wait. If you believe the market is going to level out or fall, you're going to strike sooner rather than later.

CEOs have their fingers on the pulse where the pace of the economy is concerned. Perhaps investors can learn from their thinking.