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Directors’ disposals rebound in Hong Kong as buying falls

Chow Tai Fook chairman sells shares for first time, while buy-backs seen in HSBC, Herald Holdings, Perfect Shape Beauty Technology

PUBLISHED : Sunday, 07 August, 2016, 6:39pm
UPDATED : Monday, 16 January, 2017, 10:28am

Buying among directors fell for a fourth week while selling rebounded, based on filings on the Hong Kong stock exchange in the first week of August. A total of 15 companies recorded 70 purchases worth HK$82.9 million, compared with 10 firms filing 48 disposals worth HK$81 million.

The buy figures were down from the previous week’s 20 companies, 94 purchases and HK$142 million. The sale side, on the other hand, was sharply up from seven firms, 31 disposals and HK$10.9 million.

Buy-back activity fell for a fourth week, with only four companies that posted 19 repurchases worth HK$111 million. The figures were sharply down from the previous week’s 13 firms, 70 trades and HK$209 million.

There were several rare transactions last week with an initial buy-back by HSBC Holdings and insider purchases in Herald Holdings and Perfect Shape Beauty Technology. On the negative side, there were first-time sales by the chairman of Chow Tai Fook Jewellery Group following the sharp rebound in the share price.

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Global banking giant HSBC bought back for the first time, based on filings on the exchange since 1992, with nearly two million shares purchased on August 4 at HK$53.23 each. The trade was made on the back of the 18 per cent rebound in the share price since April from HK$45.07. Despite the rebound in the share price, the counter is still down since May last year from HK$70.82.

The initial buy-back was also made after HSBC announced on August 3 a 28.7 per cent drop in first-half pre-tax profit to US$9.71 billion. More buy-backs are on the way as the group intends to repurchase up to US$2.5 billion in the second half of this year in a bid to reduce its outstanding ordinary shares.

The blue chip closed at HK$53.50 on Friday.

Buying recovers while directors’ disposals continue to increase in Hong Kong

Managing director Stan Cheung Tsang-kay recorded his first trades in toy and gift product manufacturer Herald since July 2014 with 165,000 shares bought from July 4 to 18 and a further 25,000 shares on July 29 at HK$1.02 each. The trades increased his holdings to 13.74 per cent of the issued capital. The purchases were made on the back of the 20 per cent gain in the share price since August 2014 from 85 HK cents.

Cheung previously acquired two million shares in July 2014 at 91 HK cents each. Before that, he sold 120,000 shares in February 2011 at HK$1.40 each and bought 390,000 shares from January to February 2008 at 97 HK cents each.

The stock closed at HK$1.06 on Friday.

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Chairman and chief executive Au-yeung Kong recorded his first trades in slimming and beauty service provider Perfect Shape this year, with 3.5 million shares bought from July 28 to 29 at 77 HK cents each. The trades increased his holdings to 64.7 per cent of the issued capital. The purchases were made on the back of the 37 per cent drop in the share price since December from HK$1.23 each.

Au-yeung previously acquired 10 million shares in December at HK$1 each and one million shares in April 2014 at HK$2 each. His purchases since April 2014 are the first trades by a director of the company since the stock was listed in February 2012. Au-yeung’s last acquisition price was lower than the listing price of 88 HK cents.

Buying continues climb while Hong Kong directors’ disposals show drop

Investors should note that there were buy-backs by the company earlier this year with 1.2 million shares purchased on January 14 at HK$1.03 each. Last year, the group also acquired 3.3 million shares from July to December at an average of HK$1.48 each and 3.1 million shares from February to March at an average of HK$1.69 each.

The counter closed at 77 HK cents on Friday.

Chairman Henry Cheng Kar-shun recorded his first sales in jewellery retailer Chow Tai Fook since the stock was listed in December 2011 with the disposal of his entire holdings of 1.9 million shares from July 15 to 29 at an average of HK$6.01 each. The shares sold represented 0.02 per cent of the issued capital.

The disposals were made on the back of the 42 per cent rebound in the share price since January from HK$4.23. Despite the rebound, the counter is still down since March 2014 from HK$12.47. The sales were made at sharply lower than Cheng’s purchase price, based on the initial 1.9 million shares that he acquired in March 2012 at an average of HK$12.62 each. His sale prices were lower than the listing price of HK$15.

The stock closed at HK$5.89 on Friday.

Robert Halili is managing director of Asia Insider

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