HONG KONG STOCKS
The Insider
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Directors turn cautious towards share buybacks after Brexit

In spite of the muted activity, insider purchases and other buybacks were seen in Paladin, Beijing Enterprises Medical, Sunwah Kingsway Capital and Goldin Financial Holdings

PUBLISHED : Sunday, 03 July, 2016, 3:21pm
UPDATED : Monday, 16 January, 2017, 10:28am

Directors were cautious on Brexit with no noticeable jump in the purchase activity based on exchange filings during the holiday-shortened week of June 27 to 30. A total of 42 companies recorded 173 purchases worth HK$183 million last week. The number of firms was not far off from the previous week’s five-day total of 47 companies. The number of trades and buy value, however, were sharply down from the previous week’s 244 purchases worth HK$320 million. Meanwhile, the selling by directors was flat with 13 firms that recorded 44 insider sales worth HK$59 million. The figures were consistent with the previous week’s 14 companies, 66 disposals and HK$55 million.

On the buybacks front, companies were cautious the week following Brexit with only 21 that posted 94 repurchases worth HK$87.6 million. The number of trades was consistent with the previous week’s 132 transactions but the number of firms and value were sharply down from the previous week’s 28 companies and HK$502 million.

There were several stocks that recorded purchases on news of Brexit as share prices fell last week. Among the firms that recorded price support are buybacks in Paladin and Beijing Enterprises Medical and insider buys in Sunwah Kingsway Capital and Goldin Financial Holdings.

Property development and property investment firm Paladin picked up where it left off in February with 4.83 million shares purchased from June 24 to 29 at HK$0.30 each. The trades, which accounted for 74 per cent of the stock’s trading volume, were made on the back of the 14 per cent drop in the share price since the last week of May from HK$0.35. The counter is also down since March from HK$0.40. The Group previously acquired 23.6 million shares from January 6 to February 12 at HK$0.30 each. Prior to the repurchases this year, the company acquired 31.67 million shares from May 1997 to January 1998 at HK$1.58 to HK$0.70 each or an average of HK$0.89 each. The counter closed at HK$0.305 on Thursday.

Healthcare services provider Beijing Enterprises Medical and Health Industry Group bought back for the first time since December 2004 with 7.3 million shares purchased from June 28 to 30 at an average of HK$0.50 each. The trades, which accounted for 16 per cent of the stock’s trading volume, were made on the back of the 62 per cent drop in the share price since May 2015 from HK$1.32. Despite the fall in the share price, the counter is still up since May 2012 from HK$0.20. The Group previously acquired 24.94 million shares from April to December 2004 at HK$1.15 to HK$0.85 each or an average of HK$1.07 each. The counter closed at HK$0.57 on Thursday.

CEO Michael Choi Koon Ming picked up where he left off in financial services provider Sunwah Kingsway Capital Holdings in December 2015 with 900,000 shares purchased on June 24 at HK$0.13 each. The trade increased his holdings by 5 per cent to 18.230 million shares or 0.33 per cent of the issued capital. The purchase was made on the back of the 13 per cent drop in the share price this month from HK$0.15. He previously acquired 2.76 million shares on December 15, 2015 at HK$0.14 each and sold 200,000 shares from April 15 to 23, 2015 at HK$0.24 to HK$0.29 each or an average of HK$0.26 each. Prior to his trades since 2015, Mr. Choi acquired 8.4 million shares from September to December 2012 at HK$0.13 to HK$0.16 each or an average of HK$0.136 each and 1.09 million shares in October 2011 at HK$0.12 each. Also positive this year is Chairman of the Board Jonathan Choi Koon Shum with 9.7 million shares purchased from January 4 to 5 at HK$0.15 each. The trades increased his holdings to 3.059 billion shares or 55.41 per cent of the issued capital. He previously acquired 18.3 million shares from December 16 to 28, 2015 and 60 million shares in February 2014 at an average of HK$0.16 each. The counter closed at HK$0.132 on Thursday.

Chairman Pan Su Tong resumed his positive track in factoring services provider, financial investor, and wine producer Goldin Financial Holdings after recording a sale on May 26 with 416,000 shares purchased on June 24 at HK$4.89 each. The trade increased his holdings to 4.932 billion shares or 70.56 per cent of the issued capital. The purchase was made at below his sale price last month based on the 350,000 shares that he sold on May 26 at HK$5.35 each. Prior to that disposal, the chairman acquired 8.5 million shares from March 24 to May 18 at an average of HK$7.53 each and a net 1.22 million shares from January 11 to 28 at HK$12.56 to HK$8.74 each or an average of HK$10.18 each. Prior to his trades this year, the chairman sold 1.75 million shares from December 28 to 29, 2015 at HK$16.70 each. Prior to those disposals, the chairman acquired a net 5.4 million shares from December 18 to 23, 2015 at HK$18.04 each and 11.3 million shares from November 30 to December 4, 2015 at HK$11.13 each. The stock closed at HK$4.88 on Thursday, the final day of trade ahead of the holiday weekend.

Robert Halili is managing director of Asia Insider