STOCK MARKET
The Insider
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Director buying activity and company buy-backs surge following Brexit sell-off

Buy-backs were seen in Ourgame International, Shimao Property and Xinming China Holdings, while insider buys were recorded in Tenfu (Cayman) Holdings and Texwinca Holdings

PUBLISHED : Sunday, 10 July, 2016, 3:23pm
UPDATED : Monday, 16 January, 2017, 10:28am

Director activity surged last week based on stock exchange filings from July 4 to 8, with 56 companies that recorded 233 purchases worth HK$516 million versus 22 firms with 73 disposals worth HK$183 million. The figures were sharply up from the previous week’s four-day total of 42 companies, 173 purchases and HK$189 million on the buying side and 13 firms, 44 disposals and HK$59 million on the selling side. Trading in Hong Kong was generally cautious in the last week of June following the news of Brexit on June 24.

Aside from directors, the buyback activity rebounded sharply last week with 29 firms that posted 149 repurchases worth HK$781 million. The figures were sharply up from the previous week’s 21 companies, 98 trades and HK$98 million.

There were several stocks that recorded purchases following the sharp fall in their share prices with buybacks in Ourgame International, Shimao Property and Xinming China Holdings and insider buys in Tenfu (Cayman) Holdings and Texwinca Holdings.

Online card and board games developer Ourgame International bought back for the first time since December 2014 with 512,000 shares purchased on July 6 at HK$2.90 each. The trade was made on the back of the 50 per cent drop in the share price since January from HK$5.75. The stock is also sharply down since May 2015 from HK$9.02. The group previously acquired 910,000 shares in December 2014 at an average of HK$2.66 each. The repurchases since December 2014 are the company’s first buybacks since listing in June 2014. The Group’s purchase prices were lower than the IPO prices of HK$3.70 to HK$4.80. The stock closed at HK$2.98 on Friday.

Mainland property developer Shimao Property Holdings bought back for the first time since October 2011 with 15.8 million shares purchased from July 4 to 8 at HK$9.73 to HK$10.18 each or an average of HK$10.00 each. The trades, which accounted for 37 per cent of the stock’s trading volume, were made on the back of the 19 per cent drop in the share price since March from HK$12.30. The share is also down since January 2015 from HK$17.75. The group previously acquired 84 million shares from September to October 2011 at HK$5.39 to HK$7.24 each or an average of HK$6.12 each and 56.2 million shares from October to November 2008 at HK$3.05 to HK$4.74 each or an average of HK$3.76 each. Investors should note that Chairman Hui Wing Mau acquired 8.75 million shares from April 1 to 8 at an average of HK$10.75 each, which increased his holdings to 2.299 billion shares or 66.21 per cent of the issued capital. He previously acquired nearly 34 million shares from July to September 2015 at HK$13.58 to HK$10.04 each or an average of HK$11.04 each and 40.3 million shares from June 2013 to June 2014 at HK$15.70 to HK$13.84 each or an average of HK$14.41 each. The stock closed at HK$10.08 on Friday.

Property developer Xinming China Holdings resumed its share buy-backs after the stock fell by as much as 18 per cent from its acquisition prices in June with 48,000 shares purchased from July 4 to 8 at HK$1.04 to HK$0.98 each or an average of HK$0.99 each. The trades accounted for 16 per cent of the stock’s trading volume. The group previously acquired 678,000 shares from June 2 to 20 at HK$1.01 to HK$1.20 each or an average of HK$1.06 each. The repurchases since June are the company’s first buy-backs since listing in July 2015. The group’s buy-backs prices were within the IPO prices of HK$1.10 to HK$2.10. The stock closed at HK$1.00 on Friday.

CEO Lee Chia Ling recorded the first on-market trade by a director in traditional Chinese tea-product seller and distributor Tenfu (Cayman) Holdings since the stock was listed in September 2011 with 24.4 million shares purchased on June 30 at HK$2.49 each. The trade increased his holdings by 6 per cent to 401.920 million shares or 32.75 per cent of the issued capital. The purchase was made on the back of the 24 per cent drop in the share price since May 2015 from HK$3.28. The counter is also down since May 2012 from HK$4.90. The CEO’s purchase price was lower than the IPO price of HK$6.80. The stock closed at HK$2.55 on Friday.

Chairman Poon Bun Chak recorded his first on-market trades in textile firm Texwinca Holdings since January 2013 with 300,000 shares purchased from June 28 to July 5 at HK$5.61 each. The trades increased his holdings to 664.758 million shares or 48.1 per cent of the issued capital. The purchases were made on the back of the 26 per cent drop in the share price since June from HK$7.62. The counter is also down since August 2015 from HK$8.73. The chairman previously acquired 1.9 million shares from November 2012 to January 2013 at an average of HK$6.60 each, 250,000 shares in April 2008 at HK$5.41 each and 1.3 million shares from October to December 2007 at an average of HK$6.41 each. Investors should note that the stock rose by an average of 8 per cent three months after the chairman bought shares based on 51 purchases since 1994. The stock recorded a price gain three months after on 76 per cent of those acquisitions. The stock closed at HK$5.74 on Friday.

Robert Halili is managing director of Asia Insider

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