Inside buys dive as directors' sales surge

Three-month selling spree continues, with heavy offloading of shares in gas firm ENN Energy

PUBLISHED : Monday, 21 January, 2013, 12:00am
UPDATED : Monday, 21 January, 2013, 5:36am

Purchases by directors plunged and their sales surged last week, according to stock exchange filings.

Fifteen companies recorded 44 purchases worth HK$33.5 million while 24 firms had 135 disposals worth HK$409.4 million.

The buy figures were sharply down from the previous week's 24 companies, 102 acquisitions, and HK$80.2 million. But the sales were sharply up from the previous week's 19 firms, 80 disposals, and HK$83.7 million.

The heavy selling last week was not surprising as directors have been on a selling spree in the past three months, with an average of 71 disposals worth HK$106 million each week since November. The figures are up sharply from the weekly averages of 33 disposals and HK$66.3 million from January to October last year.

Even more significant, directors have recorded 224 disposals worth HK$508 million so far this month, already more than the 145 trades worth HK$298.7 million in January last year.

Among the top sellers last week were directors of ENN Energy, Honghua Group, and Newtree Group.

The heavy sales followed the sharp gain in these companies' share price in the past year.

There was heavy selling in mainland gas firm ENN Energy, with seven of its 12 board members unloading a combined 6.3 million shares worth HK$215.49 million at an average of HK$34.06 each. The disposals accounted for 46 per cent of the stock's trading volume and were made from January 9 to 15 at an average of HK$34.06 each.

The sales were made at a huge profit, based on the 8.405 million shares that they acquired by exercising options on December 6 at HK$16.26 each. The disposals were also made on the back of the 27 per cent rise in the share price since June from HK$26.80.

Six of the sellers, including top board members chairman Wang Yusuo and chief executive Cheung Yip-sang, hold executive positions.

Wang sold 100,000 shares on January 9 at HK$34.11 each, trimming his holdings to 327.091 million shares, or 30.21 per cent of the issued capital.

Cheung unloaded 272,000 shares on January 15 at HK$34.17 each, cutting his stake by 7 per cent to 3.808 million shares, or 0.35 per cent. The sales were not surprising as these two directors had previously sold a combined 2.63 million shares via options in May last year at an average of HK$27.40 each.

Executive chairman Zhang Mi unloaded more shares of drilling rig manufacturer Honghua after the stock rose by 71 per cent from HK$2.05 on December 11.

Zhang sold a net nine million shares from January 14 to 15 at an average of HK$3.51 each. The trades cut his holdings to 1.596 billion shares, or 49.4 per cent of the issued capital.

Investors should note that there were sales by China National Offshore Oil Corporation and The Capital Group Companies, in the fourth quarter of last year. CNOOC ceased to be a substantial shareholder on December 4 following the sale of 260,000 shares at HK$2 each, which lowered its stake to 161.184 million shares or 4.99 per cent.

Executive chairman Chum Hon-sing sold more shares of household and clinical hygienic disposable products maker and distributor Newtree.

Chum sold 12.6 million shares from January 10 to 16 at an average of HK$2 each.

The trades cut his holdings to 360.79 million shares, or 54.12 per cent of the issued capital.

He has unloaded 25.23 million shares worth HK$50.47 million since October at an average of HK$2 each.

The disposals since October are the first on-market trades by a director of the company since the stock was listed in January 2011. The sales were made on the back of the rise in the share price since June from HK$1.30.

The counter is also sharply up since December 2011 from 35.5 HK cents.

The chairman's sale prices were slightly higher than the IPO price of HK$1.95. The stock closed at HK$1.99 on Friday.

Robert Halili is the managing director of Asia Insider