Buying hits record as directors rush to support stock prices

Buying among directors was high for a second week while selling surged, based on filings to the exchange during the holiday-shortened week of December 22 to 24. A total of 46 companies recorded 205 purchases worth HK$429 million, against 19 firms with 49 disposals worth HK$91 million.

The figures on the buying side were consistent with the previous week's five-day totals of 68 firms, 317 purchases and HK$393 million. On the selling side, the number of companies and the value were up from 18 firms and HK$64 million while the number of trades was not far off from the previous week's 56.

Buying by directors this month has reached record highs for December since 1993, with 134 directors of 115 firms racking up 961 purchases worth HK$1.48 billion.

The number of directors and companies are even higher than the average of 113 directors and 99 firms that reported purchases during the global downturn in December 2007 and 2008. In terms of value, the acquisitions so far this month exceeded the HK$1.2 billion of purchases in December 2007 and nearly tripled the HK$540 million in 2008. Meanwhile, the number of acquisitions will likely surpass the record 1,001 set in December 2008.

The record buying was largely due to insider price support. Among the stocks that saw insider purchases following the fall in the shares are BYD, China Huishan Dairy Holdings and Pan Asia Environmental Protection Group.

Chairman and chief executive Wang Chuanfu, non-executive director Xia Zuoquan and Himalaya Capital Investors acquired shares of rechargeable batteries, car and electronic product manufacturer BYD. The trades were made on the back of the drop in the share price since September from HK$57. Despite the fall, the counter is still up since July 2012 from HK$12.68.