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  • Jul 31, 2014
  • Updated: 12:17pm
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PUBLISHED : Monday, 30 June, 2014, 1:35am
UPDATED : Monday, 30 June, 2014, 2:08am

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

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

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