The Insider
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Director stock buys drop to four week low on Hong Kong exchange

PUBLISHED : Sunday, 11 June, 2017, 4:26pm
UPDATED : Sunday, 11 June, 2017, 10:56pm

Buying by directors was low for the first time in the past four weeks with 34 companies that recorded 139 purchases worth HK$95 million, based on filings on the Hong Kong stock exchange from June 5 to 9.

The number of firms was not far off from the previous week’s four-day totals of 32 companies but the number of trades and value were sharply down from the previous week’s 177 purchases worth HK$185 million. The selling, on the other hand, fell for the first time in the past three weeks with eight companies that recorded 35 disposals worth HK$76 million. The figures were down from the previous week’s 13 firms, 39 disposals and HK$393 million.

While buying by directors was low last week, buy-back activity was high for the third consecutive week with 19 companies that posted 72 repurchases worth HK$350 million based on filings from June 2 to 8. The figures were consistent with the previous five-day period of 17 firms, 74 trades and HK$324 million.

Buy-backs took the spotlight last week with rare repurchases in miniature acoustic components manufacturer AAC Technologies, Regal Hotels International and Yantai North Andre Juice.

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AAC recorded its first buy-back since April 2008 with one million shares purchased on June 7 at HK$91.84 each. The trade was made on the back of the 20 per cent drop in the share price since April from HK$114.20. Despite the fall in the share price, the counter is still up since July 2012 from HK$22.55. The group previously acquired 20 million shares from May 2007 to April 2008 at an average of HK$7.40 each. Investors should note that JPMorgan Chase reported a purchase-related filing on May 18 of 1.17 million shares at HK$86.62 each, which increased its holdings to 15.08 per cent of the issued capital. The group previously sold a net 1.07 million shares from April 21 to 27 at HK$105.18 to HK$107.20 each and a purchase-related filing on April 20 of 2.04 million shares at HK$99.36 each.

Prior to its notices this year, the fund manager acquired a net 8.43 million AAC shares from March 2006 to January 2015 at HK$6.25 to HK$46.58 each and an initial filing in March 2006 of 158.5 million shares at HK$6.25 each, which raised its interest to 16.06 per cent. The stock closed at HK$99.50 on Friday.

Hotel operator and property investor Regal recorded its first buy-backs since October 2016 with 488,000 shares purchased from June 5 to 6 at an average of HK$6.57 each. The trades were made on the back of the 56 per cent rise in the share price since January from HK$4.21. The group previously acquired nearly eight million shares from August to October 2016 at an average of HK$4.33 each.

Prior to the repurchases since 2016, the group acquired 19.9 million shares from January to July 2014 at an average of HK$4.80 each, 20.1 million shares in December 2013 at HK$4.70 each and 37.34 million shares from April to June 2012 at an average of HK$3.09 each. Prior to the buy-backs since April 2012, Regal acquired nearly 600 million shares from October 2005 to January 2011 at an average of HK$0.546 each and 135.4 million shares from 1994 to 1998 at 95 HK cents to HK$2 each.

The recent buy-backs bode well for shareholders as the stock rose by an average of 78 per cent six months after the group repurchased shares, based on 413 filings since 2005. The stock recorded a price gain six months after on 63 per cent of those filings.

Also positive this year is Regal chairman and chief executive Lo Yuk-sui with 116,000 shares purchased on March 28 at HK$4.27 each, which increased his holdings to 68.02 per cent of the issued capital. He previously acquired 3.6 million shares from June to July 2016 at an average of HK$3.65 each and 832,000 shares from March to April 2016 at an average of HK$3.75 each. The stock closed at HK$6.85 on Friday.

Juice concentrate manufacturer and distributor Yantai bought back for the first time since July 2016 with 33,000 shares purchased on June 5 at HK$4.41 each. The trade was made on the back of the 13 per cent rebound in the share price since December 2016 from HK$3.90. The counter is also up since July 2016 from HK$3.33. The group previously acquired 13 million shares from June to July 2016 at an average of HK$3.67 each.

Prior to the repurchases since June 2016, the group acquired 11.6 million shares in June 2015 at an average of HK$3.38 each, 16.4 million shares from June to July 2014 at an average of HK$2.61 each and 175.66 million shares from February to May 2012 at an average of 34 HK cents each. The stock closed at HK$4.45 on Friday.

Robert Halili is managing director of Asia Insider

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