Inside selling extends run in volatile market

But some company chiefs still snap up shares in their firms despite increases in stock price

PUBLISHED : Monday, 26 November, 2012, 12:00am
UPDATED : Monday, 26 November, 2012, 7:06am

Buying of their own company shares by directors was low for the fifth straight week and selling was high for the third week in a row, based on filings made to the stock exchange for the period November 19 to 23.

A total of 21 companies recorded 85 purchases worth HK$34.2 million, versus 11 companies that reported 76 disposals worth HK$99.5 million. The number of purchases was up from the previous week's 75 trades, but their value was down from HK$42.6 million previously.

But sales were not far off from the previous week's mark.

Though uncertainty in the market led to heavy selling, the volatile market conditions did not deter several directors from buying shares last week.

Even more surprisingly, four stocks - Brockman Mining, Legend Strategy International, Universal Technologies, and Hengdeli Holdings - recorded insider buys following a rise in their share price.

Non-executive chairman Kwai Sze-hoi recorded his first on-market trades in mining firm Brockman since his appointment in June, with 2.1 million shares bought from November 16 to 19 at an average of 43.4 HK cents each. The trades increased his holdings to 1.531 billion shares, or 21.19 per cent of the issued capital.

The purchases came after the stock rebounded by 13 per cent from 38.5 HK cents on October 31. But the counter is still down from 55 HK cents in June.

Kwai previously acquired 10.8 million shares (as a substantial shareholder) on May 25 at 38 HK cents each and an initial filing in June 2011 of 211.42 million shares via off-market trade, which raised his interest to 6.05 per cent. The counter closed at 42 HK cents on Friday.

Chairman Kelvin Fong Man resumed buying shares of budget hotel operator Legend Strategy at a sharply higher price, with 1.63 million shares bought from November 16 to 21 at an average of HK$1.63 each. The trades raised his holdings to 102.576 million shares, or 56.99 per cent.

Man previously acquired 1.18 million shares from October 4 to 5 at an average of HK$1.08 each. The purchases since October are his first on-market trades since the stock was listed in July 2011 and were made after the stock rebounded from 97 HK cents on September 3.

Man's last purchase price was sharply higher than the IPO price of HK$1.20. He resumed buying this month after the company announced on November 7 a 720.5 per cent gain in third quarter profit to HK$23.054 million.

The stock closed at HK$1.83 on Friday.

Executive director Lau Yeung-sang resumed buying shares of Universal Technologies at a higher price, with 21.56 million shares bought from November 12 to 21 at an average of 48 HK cents each.

The trades, which accounted for 51 per cent of the stock's trading volume, lifted his holdings by 27 per cent to 100.750 million shares, or 5.81 per cent.

The purchases since October were made on the back of a rebound in the share price since July from 34 HK cents. But the stock is still down since August 2011 from 70 HK cents.

Executive director Huang Yonghua resumed buying shares of mainland timepieces retailer Hengdeli Holdings at a higher price, with one million shares bought on November 5 and a further 1.088 million shares on November 16 at an average of HK$2.75 each. The trades increased his holdings to 13.148 million shares, or 0.3 per cent.

Huang previously acquired 3.9 million shares from October 25 to 26 at an average of HK$2.45 each, 4.67 million shares from May 17 to June 1 at an average of HK$2.34 each, and 20,000 shares on January 17 at HK$2.72 each. Prior to his trades this year, Huang acquired an initial 1.6 million shares from September to November 2008 at an average of HK$1.56 each. The stock closed at HK$2.79 on Friday.