Insider activity quiet ahead of Lunar New Year, funds take the spotlight

PUBLISHED : Sunday, 29 January, 2017, 6:22pm
UPDATED : Sunday, 29 January, 2017, 7:39pm

Insider activity fell before the Chinese Lunar New Year break with 30 companies that recorded 157 purchases worth HK$303 million against 14 firms with 50 disposals worth HK$121 million. The buy figures were down from the previous week’s 37 companies, 187 purchases and HK$370 million.

On the selling side, the number of firms and trades were down from the previous week’s 17 companies and 75 disposals. The sell value, however, was up from HK$83 million.

While buying by directors fell last week, buy-back activity plunged with only 11 companies that posted 43 repurchases worth HK$91 million, based on filings from Monday to Thursday. The figures were sharply down from the previous week’s five-day totals of 17 firms, 80 trades and HK$1.4 billion.

There were only a few significant buy-back and director trades last week, with funds mostly taking the spotlight. Among them was JPMorgan Chase with purchases in Huaneng Power International, Anhui Conch Cement, Fuyao Glass Industry and China Resources Power Holdings. Value Partners was also active last week with an initial filing in Xinjiang Goldwind Science & Technology and sales in Yunnan Water Investment.

On the buy-back side, L’Occitane International resumed buying back at a higher price while China Harmony New Energy Auto Holding embarked on a buy-back programme following the sharp rebound in its share price.

JPMorgan turned positive on coal-fired power plants operator Huaneng after recording a sale on January 13 with a purchase-related filing on January 18 of 3.08 million shares at HK$5.16 each. The trade increased its holdings to 10.03 per cent of the issued capital. The group previously sold 1.2 million shares on January 13 at HK$5.08 each, a purchase-related filing on January 12 of 2.03 million shares at HK$5.09 each and a disposal-related filing on January 10 of 1.86 million shares at HK$5.03 each.

Prior to its notices this month, the fund manager reported a purchase-related filing on December 2 of 5.17 million shares at HK$4.92 each. The filings since December were made on the back of the rebound in the share price since July 25 from HK$4.25. Prior to its notices since December, the group acquired a net 296 million shares from September 2013 to July 2016 through open-market and off-market trades at HK$9.75 to HK$4.66 each and an initial filing (for the 26th time since April 2003) in September 2013 of 328,000 shares at HK$7.81 each, which raised its interest to 5.01 per cent. Overall, JPMorgan’s stake is up by 100 per cent since that initial filing in September 2013. The stock closed at HK$5.06 on Friday.

JPMorgan acquired more shares of H-share high-grade cement producer Anhui Conch at higher than its acquisition price on December 14 with a purchase-related filing on January 18 of 1.53 million shares at HK$23.27 each. The trade increased its holdings to 14.08 per cent of the issued capital. The filing was made on the back of the 12 per cent rebound in the share price since December 29 from HK$20.80. The group previously reported a purchase-related filing on December 14 of 8.7 million shares at HK$22.61 each. Prior to that purchase, the fund manager reported a disposal-related filing on December 12 of 23.97 million shares at HK$22.55 each and a disposal-related filing on November 30 of 7.03 million shares at HK$22.63 each. Prior to those sales, the group acquired a net 147.4 million shares from January 2005 to July 2016 through open-market and off-market trades at HK$7.06 to HK$84.97 each and an initial filing in January 2005 of 1.72 million shares at HK$8 each, which raised its interest to 5.34 per cent. Overall, JPMorgan’s stake is up by 164 per cent since that initial filing in January 2005. The stock closed at HK$25.15 on Friday.

JPMorgan acquired shares of float glass and vehicle glass manufacturer Fuyao Glass at higher than its sale price in December with a purchase-related filing on January 17 of 1.03 million shares at HK$23.22 each. The trade increased its holdings to 8.19 per cent of the issued capital. The group previously reported a disposal-related filing on December 14 of 347,000 shares at HK$22.28 each.

Prior to that purchase, the fund manager acquired a net 10.3 million shares from April to October through open-market and off-market trades at HK$17.53 to HK$23.10 each and an initial filing (for the fourth time since March 2015) in April 2016 of 872,100 shares at HK$18.93 each, which raised its interest to 5.08 per cent. Overall, JPMorgan’s stake is up by 61 per cent since that initial filing in April 2016.

Also positive this month is Matthews International Capital Management with a purchase-related filing on January 6 of 119,000 shares at HK$23.59 each, which boosted its stake to 6.01 per cent. The group previously reported an initial filing (for the second time since March 2015) in August of 150,000 shares at HK$20.59 each, which raised its interest to 5.01 per cent. Overall, Matthews International’s stake is up by 20 per cent since that initial filing in August 2016. The stock closed at HK$23.05 on Friday.

JPMorgan became a substantial shareholder (for the fourth time since January 2015) of coal power generation firm CR Power on January 19 following the purchase of 3.05 million shares at HK$13.63 each. The trade increased its holdings to 5 per cent of the issued capital. The initial filing was made on the back of the 13 per cent rebound in the share price since December from HK$12.04. Prior to that initial filing, the group ceased to be a substantial shareholder in November 2016 following the sale of 3.99 million shares through off-market trade, which lowered its interest to 4.99 per cent. The stock closed at HK$13.42 on Friday.

Value Partners High-Dividend Stocks Fund became a substantial shareholder of wind turbine generator manufacturer and wind power solutions provider Xinjiang Goldwind on January 17 following the purchase of 456,200 shares at HK$12.75 each. The trade increased its holdings to 5.07 per cent of the issued capital. The initial filing was made on the back of the 21 per cent rebound in the share price since November from HK$10.54. The counter is also up since February from HK$8.23. Despite the rise in the share price, the stock is still down since May 2015 from HK$19. The stock closed at HK$13.04 on Friday.

Value Partners Group recorded more sales in water supply and wastewater treatment services provider Yunnan Water at a lower price with a disposal-related filing on January 18 of 430,000 shares at HK$4 each. The trade reduced its holdings to 6.99 per cent of the issued capital. The filing was made on the back of the 9 per cent drop in the share price since October 26 from HK$4.40. The group previously sold 7.46 million shares from June to October at HK$4.13 to HK$4.49 each. Overall, Value Partners’ stake is down by 30 per cent since June. Prior to those sales, the fund manager acquired 3.7 million shares from May to December 2015 at HK$4.84 to HK$7.01 each.

Investors should note that chief executive Yu Long acquired 540,000 shares from November 30 to December 5 at an average of HK$4.15 each, which boosted his stake to 0.21 per cent. He previously acquired an initial 230,000 shares from January 13 to 21 at an average of HK$4.13 each. The purchases by Yu since December are his first on-market trades since the stock was listed in May 2015. Yu’s purchase prices were lower than the listing prices of HK$5 to HK$5.80. Yu joined the group in June 2011. The stock closed at HK$4 on Friday.

Natural and organic cosmetics retailer L’Occitaneresumed buying back at higher than its acquisition prices in December with 671,000 shares purchased on January 24 at HK$15.27 each. The trade was made on the back of the 8 per cent rebound in the share price since December 29 from HK$14.20. The group previously acquired 1.91 million shares from December 13 to 20 at an average of HK$14.66 each. Aside from the buy-backs in December, the company acquired 6.68 million shares from January to July at an average of HK$14.56 each.

Prior to the buy-backs since 2016, the company acquired 6.65 million shares from November to December 2011 at an average of HK$14.44 each. The recent buy-back bodes well for shareholders as the stock rose by an average of 27 per cent three months after the company bought shares, based on 11 filings since 2011. The stock recorded a price gain three months after on 100 per cent of those filings. The group announced its interim results in November with profit up by 31.7 per cent to 26.4 million. The stock closed at HK$15.32 on Friday.

Mainland luxury and ultra-luxury passenger vehicle dealership China Harmony bought back for the first time since listing in June 2013 with 1.56 million shares purchased from January 25 to 26 at an average of HK$3.71 each. The trades, which accounted for 10 per cent of the stock’s trading volume, were made after the stock rebounded by 36 per cent from HK$2.72 on January 11. Despite the rebound, the counter is still down since June 2015 from HK$9.96. The group’s buy-back prices were sharply below the listing price of HK$6.08. The stock closed at HK$3.73 on Friday.

Robert Halili is managing director of Asia Insider

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