Hong Kong company directors go on buying spree amid heavy trade

Acquisitions are spread across several sectors in the wake of recent declines in the share prices

PUBLISHED : Sunday, 19 January, 2014, 11:45pm
UPDATED : Monday, 20 January, 2014, 2:35am

For the second week running, director activity in Hong Kong was high with 47 companies recording 193 transactions worth HK$633 million, according to exchange filings from January 13 to 17. The figures, however, were down from the previous week's 54 firms, 211 trades and HK$814 million.

Buyers outweighed sellers with 31 companies recording 124 purchases worth HK$390 million against 18 firms with 69 disposals worth HK$243 million.

Buy-back activity was low with only 13 companies posting 45 repurchases worth HK$86 million, down sharply from the previous week's 19 firms, 91 trades and HK$222 million.

The buying was spread across several sectors with buy-backs in Fairwood and China Resources and Transportation and director purchases in China Flavors & Fragrances and Hongkong and Shanghai Hotels.

Fast-food chain Fairwood picked up where it left off in August last year with 110,000 shares purchased from January 10 to 15 at an average of HK$15.61 each. The trades, which accounted for 14 per cent of the stock's trading volume, were made on the back of the 7 per cent drop in the share price since September last year.

The group previously acquired 540,000 shares from June to August last year at an average of HK$16.04 each and 3.1 million shares from May 2010 to April 2012 at an average of HK$10.84 each.

The stock closed at HK$15.74 on Friday.

Expressway operator China Resources and Transportation bought back shares for the first time since 1992 with 9.6 million shares purchased from January 13 to 17 at an average of 36 HK cents each. The acquisitions were made on the back of the 22 per cent drop in the share price since November last year from 46 HK cents.

Investors should note that chairman Cao Zhong bought 11 million shares on December 18 last year at 34 HK cents each, which raised his holdings to 11.06 per cent of the issued capital.

The counter closed at 38 HK cents on Friday.

Chief executive Wang Mingfan recorded his first trade in flavour and fragrance producer China Flavors and Fragrances since he joined the group in 1996 with 18.67 million shares purchased on January 14 at HK$1.20 each. The trade increased his holdings to 59.48 per cent.

The counter closed at HK$1.40 on Friday.

Insider sentiment is positive in luxury hotel firm Hongkong and Shanghai Hotels with chairman Michael Kadoorie and non-executive deputy chairman Ian Boyce buying a combined 238,000 shares from January 6 to 10 at an average of HK$10.55 each.

The trades, which increased Kadoorie's holdings to 52.54 per cent, were made on the back of the 19 per cent drop in the share price since October last year.

Investors should note that the stock rose by an average of 25 per cent six months after Kadoorie bought shares based on 160 purchases since 1998.

The stock closed at HK$10.78 on Friday.

Robert Halili is managing director of Asia Insider