Directors feel urge to sell

For the second successive week, trading on the HK exchange is dominated by share disposals

PUBLISHED : Monday, 19 November, 2012, 12:00am
UPDATED : Monday, 19 November, 2012, 7:18am


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The buying was low for a fourth week while the selling among directors was high for the second straight week, based on filings on the Hong Kong exchange from November 12 to 16.

In all, 21 companies recorded 75 purchases worth HK$42.6 million against 14 firms with 78 disposals worth HK$100 million.

The number of firms and trades on the buying side were slightly up from the previous 18 companies and 65 purchases but the value was sharply down from the previous week's acquisitions worth HK$69 million. The sales, on the other hand, were consistent with the previous week's 14 firms, 75 disposals, and HK$103.5 million.

While the buying by directors was low last week, the buy-back activity among listed firms surged with 14 companies that posted 81 repurchases worth HK$149.4 million. The figures were up from the previous week's 13 firms, 48 trades and HK$72.4 million.

Top buyers in terms of value were Johnson Electric Holdings, Soho China, First Pacific and ePro with trades worth a combined HK$116 million.

Electronic components manufacturer Johnson Electric was the top buyer in terms of value with 10.9 million shares purchased worth HK$53.5 million, at an average of HK$4.90 each. It acquired 4.4 million shares on November 9 at HK$4.84 each.

The buy-backs since November 9 of 15.3 million shares accounted for 38 per cent of trading volume. The repurchases were made after it announced on November 8 a 16 per cent drop in first-half profit to US$85.33 million. The stock closed at HK$4.99 on Friday.

The second top buyer in terms of value was mainland commercial property developer Soho China with 5.57 million shares purchased worth HK$31 million at an average of HK$5.57 each. The group also acquired 5.36 million shares from November 7 to 9 at an average of HK$5.64 each. The buy-backs since November 7 totalling 10.9 million shares accounted for 25 per cent of the stock's trading volume. The stock closed at HK$5.51 on Friday.

Also active last week was conglomerate First Pacific with 2.6 million shares purchased worth HK$21.5 million from November 12 to 15 at an average of HK$8.27 each. It also acquired 226,000 shares on November 9 at HK$8.54 each. The buy-backs since November 9 totalling 2.83 million shares accounted for 17 per cent of trading volume. The stock closed at HK$8.31 on Friday.

Lastly, IT software products developer ePro resumed buying back after the stock fell 40 per cent from HK$1.05 in March with 15.2 million shares purchased from November 13 to 16 at an average of 63 HK cents each. The trades accounted for 79 per cent of trading volume.

It previously acquired 66 million shares from February 16 to 29 at an average of HK$1.14 each and 67.5 million shares from September to November 2011 at an average of HK$1.04 each.

The trades since September 2011 are the company's first buy-backs since the stock was listed in July 2000. The counter closed at 63 HK cents on Friday.

Robert Halili is managing director of Asia Insider