Directors lose appetite for shares

While the number of purchases was down, big volumes in two companies raised total value

PUBLISHED : Monday, 05 November, 2012, 12:00am
UPDATED : Monday, 05 November, 2012, 7:05am

Buying of their own company shares by directors fell for the second straight week, based on filings made with the stock exchange from October 29 to November 2, with 17 companies reporting 73 purchases worth HK$156.7 million.

The number of companies reporting buys and the number of trades were down from the previous week's four-day totals of 23 companies and 86 purchases. The buy value, however, was sharply up from the previous week's purchases worth HK$38.4 million.

The increase was due to large buys in China Precious Metal Resources and Chong Hing Bank worth a combined HK$124 million.

By contrast, insider sales were down, with only 11 companies reporting 58 disposals worth HK$42.3 million, down from the previous week's 16 companies that reported 59 disposals worth HK$137.9 million.

The top buyer last week in terms of value was executive director Chang Yim-yang of gold mining firm China Precious Metal Resources. Chang bought 67.85 million shares for HK$99.6 million on October 25 and October 26 at an average of HK$1.47 each.

The trades increased his holdings by 26 per cent to 327.206 million shares, or 7.52 per cent of the issued capital.

Chang's purchases were made after the stock rebounded from HK$1.10 in July. It closed at HK$1.50 on Friday.

The second top buyer last week was chairman Liu Lit-mo of Chong Hing Bank, with 1.8 million shares bought worth HK$23.9 million on October 30 at HK$13.30 each. The trade increased his holdings to 256.346 million shares, or 58.93 per cent.

The acquisition was made following a 9 per cent rebound in the share price since June from HK$12.16.

Liu previously acquired 2.5 million shares from September to December last year at an average of HK$14.49 each; 3.02 million shares from March to June 2010 at an average of HK$14.35 each; and 10.25 million shares from August 2005 to December 2008 at an average of HK$13.35 each.

The stock rose by an average of 17 per cent six months after the chairman bought shares, based on 269 acquisitions since 2005. The counter recorded a price gain six months after on 75 per cent of those purchases. It closed at HK$14.10 on Friday.

While the rebound in share prices prompted insider buying in China Precious Metal Resources and Chong Hing Bank, directors of Kingsoft and Extrawell Pharmaceutical were less optimistic as they unloaded heavily last week following steep price gains.

Executive director Zou Taotao recorded his first on-market trade in gaming developer Kingsoft since March last year, with 133,000 shares sold on October 30 at HK$4.41 each. This cut his holdings by 16 per cent to 692,000 shares, or 0.06 per cent. The sale was made following a 58 per cent rebound in the share price since December from HK$2.79. Despite the rebound in the share price, the counter is still down since July last year's HK$5.45.

Also bearish last month was fund manager FIL, with a disposal-related filing on October 18 of 347,000 shares at HK$4.87 each, which lowered its stake to 69.985 million shares, or 5.98 per cent. FIL previously reported a purchase-related filing on October 5 of 355,000 shares at HK$4.90 each and an initial filing on June 8 of 678,000 shares at HK$3.47 each, lifting its interest to 5.01 per cent.

There were buy-backs by the company earlier this year, with 1.98 million shares bought from August 27 to September 6 at an average of HK$3.59 each. The purchase price was near the IPO price of HK$3.60. The stock closed at HK$4.79 on Friday.

Executive chairman Mao Yumin recorded his first on-market trades in pharmaceutical firm Extrawell Pharmaceutical since he joined the group in June 2001, with 21 million shares sold from October 22 to 25 at HK48 cents each. The trades, which accounted for 20 per cent of the stock's trading volume, cut his holdings to 665.306 million shares, or 29.05 per cent.

Robert Halili is managing director of Asia Insider