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Buy-back activity gains steam in Hong Kong as director disposals dwindle

Company purchases for June far below the averages for the same month since 2007

PUBLISHED : Monday, 30 June, 2014, 1:35am
UPDATED : Monday, 30 June, 2014, 2:08am

Directors have kept up the pace on stock purchases, with the value of such transactions rising for a third week, filings to the stock exchange show.

Twenty-four companies recorded 95 acquisitions worth HK$493 million, against 16 firms with 44 disposals at HK$75 million.

The number of companies and the value on the buying side were up from the previous week's 21 firms and HK$171 million. The number of deals, however, dropped from 108.

On the sales side, transactions were down from 19 companies with 71 disposals at HK$445 million.

Aside from directors, buy-back activity also rose last week, with 15 companies posting 73 purchases worth HK$94 million. The number of firms and trades was up from the previous week's 11 companies and 66 transactions. The value, however, was sharply down from HK$315 million.

The purchases last week boosted the buy-back totals for the month to 22 companies, 215 trades and HK$568 million. The figures are far below the averages for June since 2007 of 31 firms, 332 trades and HK$865 million.

Among the firms that made buy-backs last week were Hydoo International Holding, Maoye International Holdings and Sun Hung Kai & Co.

Hydoo, a developer and operator of trade centres, resumed buying after the stock fell 15 per cent from HK$2.95 on June 17, with 3.7 million shares purchased during the week at an average of HK$2.50 each. The trades accounted for 5 per cent of the stock's trading volume.

The group had acquired 11.4 million shares from May 9 to 21 at an average of HK$2.74 each. The trades since last month were the group's first buy-backs since the stock was listed in October last year. The buy-back prices were higher than the initial public offering price of HK$2.15.

The stock closed at HK$2.48 on Friday.

Department store operator Maoye recorded its first buy-backs since August last year, with 7.47 million shares picked up from Wednesday to Friday at an average of HK$1.25 each.

The trades, which made up 32 per cent of the stock's trading volume, followed a 16 per cent rebound in the share price since last month from HK$1.08. Despite the bounce, the stock is down from HK$1.72 in November last year.

The shares ended at HK$1.28 on Friday.

Wealth management and broking service provider Sun Hung Kai saw a combined 41.3 million shares purchased from June 3 to 24 at an average of HK$5.80 each. The trades accounted for 26 per cent of the stock's trading volume. Chairman Lee Seng Huang also made a large acquisition.

During the period, Sun Hung Kai bought 4.07 million shares at an average of HK$5.76 each, including 207,000 shares on Monday and Tuesday at an average of HK$5.88 each.

The company also acquired 4.66 million shares from April 23 to May 30 at an average of HK$5.38 each.

Overall, the group has bought back 8.72 million shares since April at an average of HK$5.56 each. The buy-backs this quarter were made at higher than the company's acquisition prices from August last year to March this year.

Lee recorded his first on-market trade since December last year with 37.3 million shares bought on June 20 at HK$5.80 each. The trade increased his direct holdings to 74.28 per cent of the issued capital.

The stock finished at HK$6.16 on Friday.

Robert Halili is the managing director of Asia Insider