Share-buying bounces back strongly after three slow weeks

Value of sales also robust, led by Victor Fung disposing of HK$113m of Convenience Retail

PUBLISHED : Monday, 20 August, 2012, 12:00am
UPDATED : Monday, 20 August, 2012, 4:51am

Share-buying by directors rebounded last week after falling for three straight weeks, with filings showing 23 companies disclosed 88 purchases worth HK$340.6 million.

The figures were up sharply on the previous week's 15 companies reporting 59 purchases worth HK$22.7 million.

Aside from director purchases, buyback activity among listed firms surged, with seven companies posting 29 repurchases worth HK$164.7 million.

The figures were sharply up from the previous week's five companies that reported 11 trades worth HK$1.49 million.

On the sell side, a paltry three companies reported three disposals, down from four companies and 11 disposals. But last week's sales value was sharply up from the previous week's sales of just HK$23.8 million.

The huge sell value was due to a huge disposal by Victor Fung, chairman of Convenience Retail Asia, of shares worth HK$113 million.

That was eclipsed by purchases by his brother, chairman William Fung, in blue chip Li & Fung last week worth HK$257 million.

William Fung was one of four directors who bought shares of Li & Fung last week worth HK$296 million.

Aside from Li & Fung, there was heavy activity in the Lenovo Group, with four non-executive directors buying shares before the announcement of first-quarter results last week.

Chairman and non-executive director Victor Fung recorded his first on-market trade in Convenience Retail Asia since the company moved its listing from GEM to the main board in June last year, with 26 million shares sold on August 8 at HK$4.35.

The trade reduced his holdings 8 per cent to 311.792 million shares, or 42.27 per cent of the issued capital. The disposal was made on the back of the 40 per cent rise in the share price since February. The counter is also sharply up since April 2010's HK$1.65.

The sale was made after the company announced a 32.85 per cent gain in first-half profit to HK$103.647 million. The stock closed at HK$4.35 on Friday.

Chairman William Fung, CEO Bruce Rockowitz and non-executive directors Martin Tang and Paul Edward Selway-Swift moved in to support the share price of consumer products exporter Li & Fung after the stock plunged from HK$15.98 on August 9, with a combined 23.16 million shares purchased from August 10 to 14 at an average of HK$12.78.

Aside from this recent price fall, the stock is sharply down since March's HK$19.41. The purchases were also made after the company announced a 33 per cent gain in first-half profit to HK$312 million.

William Fung and Rockowitz accounted for the bulk of the acquisitions.

Also positive on Li & Fung this month was Capital Research and Management, with a purchase-related filing on August 10 of 64.2 million shares at HK$12.67, which boosted its stake 13 per cent to 558.656 million shares.

The group previously reported an initial filing in August last year of 12.03 million shares at HK$12.80, which raised its interest to 5.11 per cent. Overall, the fund manager's stake is up by 144.52 million shares, or 35 per cent, since that initial notice in August 2011.

The blue chip closed at HK$12.74 on Friday.

Non-executive directors Wu Yi Bing and independent non-executive directors Nicholas Allen, William Grabe and Ting Lee Sen acquired Lenovo shares before the release of the company's first-quarter results on August 16, with a combined 25,000 shares purchased on August 7 at HK$5.86.

The acquisitions were made on the back of a 20 per cent drop in the share price since June, from HK$7.35. Lenovo posted a 32.8 per cent gain in first-quarter profit to HK$144.436 million.

Aside from these directors, the company bought back shares before the results, with 57.246 million purchased from June 25 to July 13 at an average of HK$5.98.

It acquired 157.76 million from June 2010 to March 2011 at an average of HK$4.26; 180.1 million from June 2006 to August 2008 at HK$2.20 to HK$5.99, or an average of HK$4.65; and 120.07 million from August 2001 to June 2004 at an average HK$3.10.

The stock closed at HK$6.94 on Friday.

Robert Halili is managing director of Asia Insider.