Lenovo, Tencent directors lead rush to unload shares

Fantasia ramps up buy-back despite rally in stock price, while overall buying remains strong

PUBLISHED : Monday, 25 November, 2013, 3:01am
UPDATED : Monday, 25 November, 2013, 3:01am

Selling by directors surged last week, with 18 firms reporting 75 disposals worth HK$478 million, up from the previous week's nine companies that reported 43 disposals valued at HK$96 million.

The number of buying transactions remained high, with 23 companies reporting 113 purchases worth HK$271 million, against 21 companies with 128 purchases previously. But the value was sharply down from HK$957 million.

Buy-back activity remained high, with nine companies posting 32 repurchases worth HK$432 million, consistent with the previous week's eight companies and 35 repurchases, but the value soared from HK$148 million.

The surge in buy-back value was led by Fantasia, which picked up 220 million shares worth HK$336 million from November 18 to 22 at an average of HK$1.50 each.

The trades were significantly more than the 93.7 million shares worth HK$135 million that the property developer bought back from October 28 to November 15.

Even more surprisingly, the company ramped up its buy-back activity despite a 25 per cent gain in the share price since October 28 from HK$1.25 to a high of HK$1.56 last week.

The increase in the share price was not surprising as the repurchases in the past four weeks accounted for more than 72 per cent of the stock's trading volume.

The stock closed at HK$1.50 on Friday.

The huge value of director sales was due to disposals in Lenovo and Tencent worth a combined HK$328 million.

Chairman Yang Yuanqing and non-executive directors Ma Xuezheng and Zhu Linan unloaded shares of Lenovo after the personal computer and smartphone manufacturer announced its results on November 7.

The three directors sold 31.6 million shares worth HK$290 million from November 11 to 21 at an average of HK$9.17 each. The sales accounted for 7 per cent of the stock's trading volume.

The company posted a 29.7 per cent gain in first-half profit to US$393.6 million.

The most bearish was Yang with 25 million shares sold from November 18 to 21 at an average of HK$9.23 each. The trades reduced his holdings to 7.68 per cent of the issued capital.

He previously sold 15 million shares in September at an average of HK$7.56 each and 7.9 million shares in February at an average of HK$8.23 each.

The counter closed lower from Yuan's last sale price at HK$9.03 on Friday.

Executive director Martin Lau Chi-ping and independent non-executive director Li Dongsheng unloaded shares of Tencent after the mainland internet business service provider announced its results on November 13.

The two sold a combined 140,000 shares from November 15 to 19 at an average of HK$419.83 each.

The group posted a 25.06 per cent gain in third-quarter profit to 11.59 billion yuan (HK$14.7 billion).

Lau sold 100,000 shares on November 19 at HK$420.34 each, which reduced his stake to 0.48 per cent. He previously sold 100,000 shares in August at HK$356.76 each and 400,000 shares from May to June at an average of HK$304.14 each.

Li, on the other hand, sold his entire holdings of 40,000 shares on November 15 at HK$418.55 each. The sale was made at a huge profit, based on the 40,000 shares that he acquired through options on October 8 at HK$25.26 each.

He previously sold 60,000 shares in April 2011 at HK$206.80 each.

Li was appointed to the board in April 2004.

The blue chip closed higher from the directors' sale prices at HK$424.60 on Friday.

Robert Halili is managing director of Asia Insider