Buyback activity on Hong Kong exchange falls for first time in four weeks

PUBLISHED : Sunday, 27 November, 2016, 2:39pm
UPDATED : Monday, 16 January, 2017, 10:28am

The buying slowed after rising for three straight weeks while the selling among directors rose for the second straight week based on filings on the Hong Kong exchange in the fourth week of November. Buyers outweighed sellers with 33 companies that recorded 163 purchases worth HK$323 million versus 15 firms with 56 disposals worth HK$45 million. The buy figures were slightly down from the previous week’s 34 companies, 187 purchases and HK$355 million. On the selling side, the number of firms and trades were up from the previous week’s 13 companies and 38 disposals. The sell value, however, was slightly down from the previous week’s disposals worth HK$52 million.

Meanwhile, the buyback activity fell for the first time in the past four weeks with 20 companies that posted 112 repurchases worth HK$1.413 billion. The figures were down from the previous week’s 25 firms, 135 trades and HK$1.967 million.

There was bullish activity last week with several stocks that recorded purchases at higher prices with buybacks in Man Wah Holdings and insider buys in China Primary Energy and China Health Group. Not all directors resumed buying at a higher price as a director of Smartone Telecommunications bought shares at lower than his initial purchase price in December last year. On the negative side, a director of Value Convergence Holdings sold for the first time since September last year after the stock more than doubled to over HK$3 a share. Lastly, the chairman of Crocodile Garments took profits on the shares he acquired in August after the counter rose by more than 38 per cent.

Man Wah Holdings Limited (1999)

Mainland furniture manufacturer Man Wah Holdings picked up where it left off in April with 31.76 million shares purchased from November 21 to 24 at HK$5.26 to HK$5.73 each or an average of HK$5.58 each. The trades, which accounted for 45 per cent of the stock’s trading volume, were made after the stock rebounded by as much as 18 per cent from HK$4.87 on November 11. Despite the rebound in the share price, the counter is still down since July from HK$6.18. The buybacks were also made after the company announced on November 16 a 43.9 per cent gain in first half profit to HK$883.585 million. The group previously acquired 68.9 million shares from February 22 to April 1 at HK$4.36 to HK$4.97 each or an average of HK$4.61 each (adjusted for 1 for 1 bonus issue on July 18). Prior to the buybacks this year, the company acquired 271 million shares from November 2011 to March 2015 at HK$1.39 to HK$7.30 each or an average of HK$2.74 each. Investors should note that the stock rose by an average of 16 per cent three months after the group bought shares based on 137 filings since 2011. The stock recorded a price gain three months after on 75 per cent of those filings. The stock closed at HK$5.82 on Friday.

China Primary Energy Holdings Limited (8117)

Chairman Ma Zheng resumed buying shares of energy generation plants equipment manufacturer China Primary Energy Holdings at higher than her acquisition prices earlier this year with 540,000 shares purchased on November 21 at HK$0.99 each. The trade increased her holdings to 363.982 million shares or 39.1 per cent of the issued capital. Although the chairman resumed buying this month at higher price, the acquisition was made on the back of the 13 per cent drop in the share price since July from HK$1.14. Despite the fall in the share price, the counter is still up since June from HK$0.81. She previously acquired 1.05 million shares from March to April at HK$0.92 each and 2.73 million shares from January 7 to 22 at an average of HK$0.91 each. Prior to her trades this year, the chairman acquired 3.2 million shares from August to October 2015 at an average of HK$0.96 each and 8 million shares from June to July 2015 at HK$1.66 to HK$0.97 each or an average HK$1.35 each. Prior to her purchases since June 2015, Ma acquired 6.1 million shares from March to April 2015 at an average of HK$0.83 each and 910,000 shares in December 2014 at HK$1.15 each. The purchases by the chairman since December 2014 are the first on-market trades by a director of the company since the stock was listed in December 2001. Investors should note that the stock rose by an average of 22 per cent six months after the chairman bought shares based on 53 purchases since 2014. The stock recorded a price gain six months after on all of those purchases. The counter closed at HK$0.96 on Friday.

Longfor Properties Co Ltd (960)

CEO Shao Ming Xiao resumed buying shares of property developer and investor Longfor Properties at higher than his acquisition price earlier this year with 128,000 shares purchased on November 22 at HK$10.09 each. The trade increased his holdings to 49.145 million shares or 0.84 per cent of the issued capital. Although the CEO resumed buying this month at a higher price, the acquisition was made on the back of the 22 per cent drop in the share price since September from HK$12.90. He previously acquired 197,000 shares on July 7 at HK$9.89 each. Prior to his purchases this year, the CEO sold 880,000 shares in July 2012 at HK$12.93 each. Shao was appointed to the board in June 2011. The stock closed at HK$10.34 on Friday.

China Health Group Inc (8225)

Chairman William Guo Xia picked up where he left off in fully integrated pharmaceutical services provider China Health Group in May with 440,000 shares purchased on November 15 at HK$0.23 each. The trade increased his holdings to 662.091 million shares or 72.34 per cent of the issued capital. The acquisition was made on the back of the 21 per cent rebound in the share price since October from HK$0.19. Despite the rebound in the share price, the counter is still down since June from HK$0.28. The purchase was also made after the company announced on November 14 a 295 per cent gain in third quarter profit to 2.245 million yuan. Gou previously acquired 380,000 shares from May 12 to 20 at an average of HK$0.25 each, 4.52 million shares from March 21 to April 8 at an average of HK$0.20 each and 2.3 million shares on January 12 at HK$0.21 each.

Prior to his trades this year, the chairman acquired 24.5 million shares in January 2015 at an average of HK$0.123 each and 1.8 million shares in December 2014 at HK$0.10 each. The purchases by Guo since December 2014 are the first on-market trades by a director of the company since the stock was listed in July 2003. Investors should note that the stock rose by an average of 158 per cent three months after the chairman bought shares based on 18 purchases since 2014. The stock recorded a price gain three months after on all of those purchases. The counter closed at HK$0.21 on Friday.

SmarTone Telecommunications Holdings Limited (315)

Deputy chairman Allen Fung Yuk Lun recorded his first on-market trade in telecommunication firm SmarTone Telecommunications Holdings since December 2015 with 150,000 shares purchased on November 15 at HK$10.52 each. The trade increased his holdings by 59 per cent to 403,000 shares or 0.04 per cent of the issued capital. The acquisition was made on the back of the 26 per cent drop in the share price since July from HK$14.28. He previously acquired an initial 248,000 shares in December 2015 at an average of HK$11.46 each. Fung was appointed to the board in December 2013. Investors should note that there were buybacks by the company earlier this year with 1.89 million shares purchased from August 30 to September 2 at HK$12.20 to HK$12.88 each or an average of HK$12.54 each. The group previously acquired 6.9 million shares from January to May 2014 at HK$9.00 to HK$7.90 each or an average of HK$8.22 each, 75.7 million shares from November 2006 to November 2010 at HK$4.44 to HK$10.68 each or an average of HK$7.13 each and 26.9 million shares from December 1997 to June 2004 at HK$20.00 to HK$7.55 each or an average of HK$9.48 each. The stock closed at HK$10.66 on Friday.

Value Convergence Holdings Limited (821)

Executive director Philip Chau King Fai recorded his first on-market trade in financial services provider Value Convergence Holdings since September 2015 with 100,000 shares sold on November 21 at HK$3.13 each. The trade reduced his holdings to 3.920 million shares or 0.59 per cent of the issued capital. The sale was made on the back of the 119 per cent rise in the share price since September from HK$1.43. The counter is also up since July from HK$0.99. He previously sold 500,000 shares in September 2015 at an average of HK$1.71 each and 100,000 shares in May 2015 at HK$1.80 each. The sales by Chau since May 2015 are his first on-market trades since he joined the group in May 2004. The stock closed at HK$2.67 on Friday.

Crocodile Garments Limited (122)

Chairman and CEO Lam Kin Ming recorded sales in garments manufacturer and retailer Crocodile Garments Limited at higher than his acquisition price in August with 700,000 shares sold from November 15 to 16 at an average of HK$1.15 each. The trades reduced his holdings to 477.739 million shares or 50.42 per cent of the issued capital. The disposals were made on the back of the 38 per cent rise in the share price since the last week of August from HK$0.83. He previously acquired 705,000 shares on August 19 at HK$0.82 each and sold 300,000 shares on July 25 at HK$0.90 each. Prior to those transactions, Lam acquired 625,000 shares on June 24 at HK$0.68 each and 200,000 shares on January 11 at HK$0.85 each. Prior to his trades this year, the chairman acquired 50,000 shares in August 2015 at HK$0.80 each and 1.185 million shares from August 2013 to May 2014 at an average of HK$0.43 each. Prior to those purchases, Lam sold 584,000 shares in January 2013 at HK$0.54 each and one million shares in September 2012 at an average of HK$0.45 each. Investors should note that the stock fell by an average of 15 per cent six months after the chairman sold shares based on 11 disposals since 2012. The stock recorded a price fall six months after on 73 per cent of those disposals. The counter closed lower from the chairman’s last sale price to HK$0.99 on Friday.

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