Share buying by directors high for third straight week
There were several trades with huge upside potential in the share price with buybacks in Beijing Enterprises, insider buys in Haitian International and director sales in Tencent
Buying by directors was high for the third straight week with 32 companies recording 177 purchases worth HK$185 million (US$27.15 million) based on filings on the exchange during the holiday-shortened week of May 29 to June 2.
The number of firms and purchases were consistent with the previous week’s 5-day totals of 46 companies and 200 acquisitions. The buy value, on the other hand, was up from the previous week’s purchases worth HK$139 million.
On the selling side, sales were high for the second straight week with 13 firms that recording 39 disposals worth HK$393 million. The number of companies was not far off from the previous week’s 14 firms while the number of trades was sharply down from the previous week’s 90 disposals. The sell value, however, was sharply up from the previous week’s sales worth HK$257 million.
Aside from directors, buyback activity remained high with 17 companies that posted 72 repurchases worth HK$323 million based on filings from May 26 to June 1. The number of firms and trades were consistent with the previous 5-day period of 22 companies and 89 repurchases. The value, however, was sharply down from the previous 5-days’ turnover of HK$605 million.
There were several trades last week with huge upside potential in the share price with buybacks in Beijing Enterprises Holdings, insider buys in Haitian International and director sales in Tencent Holdings.
These three stocks, historically, have risen sharply following buybacks and insider trades.
Piped natural gas distributor and toll road operator Beijing Enterprises rose by an average of 8 per cent three months after and 12.5 per cent six months after the company repurchased shares based on 37 filings since 2008.
The stock recorded a price gain three months and six months after on 65 per cent of the filings.
It was bought back for the first time since May 2016 with 100,000 shares purchased on May 29 at HK$37.20 each.
The trade was made on the back of the 13 per cent drop in the share price since March from HK$42.95.
Despite the fall in share price, the counter is still up since November 2016 from HK$33.80.
The group previously acquired 8 million shares in May 2016 at HK$38.00 each and 11.7 million shares in February 2016 at an average of HK$33.99 each.
Prior to the buybacks, since 2016, the company acquired 5.93 million shares from June 2008 to December 2015 at HK$21.85 to HK$66.90 each or an average of HK$41.41 each. The stock closed at HK$37.35 on Friday.
Haitian International’s executive director Chen Ning Ning has traded in and out of the plastic injection moulding machine manufacturer’s shares a total of three times since 2009, buying low and selling high for a total gain of 73 per cent.
Chen and CEO Zhang Jian Ming acquired shares in Haitian with a combined 2.72 million shares purchased from May 22 to 29 at HK$19.18 to HK$17.96 each or an average of HK$18.36 each. The trades accounted for 23 per cent of the stock’s trading volume.
Executive director Chen Ning Ning resumed buying at higher than her trade prices in 2016 with 20,000 shares purchased from May 26 to 29 at HK$17.96 each. The trades increased her holdings by 20 per cent to 120,000 shares or 0.01 per cent of the issued capital.
Although the director resumed buying last month at a higher price, the purchases were made on the back of the 10 per cent drop in the share price since the last week of March from HK$20.00. She previously acquired an initial 100,000 shares in November 2016 at HK$14.13 each.
Prior to those purchases, the director sold her entire holdings of 270,000 shares in August 2016 at HK$15.13 each. That sale was made at a profit based on the initial 270,000 shares that she acquired in December 2015 at HK$11.38 each.
Prior to her trades since December 2015, Chen sold her entire stake of 266,000 shares in April 2015 at HK$20.01 each. Those sales were made at a profit based on the initial 266,000 shares that she acquired in January 2015 at HK$14.61 each.
Prior to her trades since 2015, she sold her entire stake of 600,000 shares in March 2011 at an average of HK$10.00 each. Those disposals were made at a profit based on the initial 600,000 shares that she acquired from September to October 2009 at HK$3.26 each.
CEO Zhang Jian Ming, on the other hand, acquired 2.7 million shares in Haitian from May 22 to 25 at an average of HK$18.37 each, which boosted his stake to 961.338 million shares or 60.23 per cent. He previously acquired 513,000 shares from January 5 to 9 at an average of HK$15.17 each, 3.25 million shares in January 2016 at HK$11.56 each and 962,000 shares in December 2015 at HK$11.30 each. The stock closed at HK$18.74 on Friday.
Meanwhile, e xecutive director Martin Lau Chi Ping recorded his highest sale price in Tencent Holdings since he started selling the Company’s shares in 2007.
Tencent shares have risen by an average of 20 per cent, six months after the director sold shares based on 205 disposals since 2007. The stock recorded a price gain six months after on 75 per cent of those disposals.
Lau sold 600,000 shares sold on May 29 at HK$274.79 each. The trade reduced his holdings to 47.568 million shares or 0.5 per cent of the issued capital. The sale was made on the back of the 13 per cent rise in the share price since May 4 from HK$243.80.
He previously sold 800,000 shares from April 3 to 5 at an average of HK$225.51 each. Prior to his sales this year, the director sold 1.3 million shares in August 2016 at an average of HK$201.16 each, 600,000 shares in July 2016 at HK$178.55 each and 1.4 million shares in March 2016, some of which were options-related sales, at an average of HK$158.71 each. Prior to his disposals since 2016,
Lau sold 34.1 million shares from September 2007 to November 2015 at HK$7.84 to HK$157.70 each or an average of HK$49.69 each. Lau joined the Group in 2005. The blue chip closed at HK$270.00 on Friday.