Directors' buying activity remains strong as selling dips

China Everbright increases its holdings amid a 36pc decline in the share price since January

PUBLISHED : Monday, 09 September, 2013, 12:00am
UPDATED : Monday, 09 September, 2013, 3:44am

Buying of their own company shares by directors rose for a fourth week in the first week of the month, with 39 companies reporting 150 purchases worth HK$140 million based on filings to the stock exchange.

The figures compared with the previous week's 21 companies and 111 purchases worth HK$107.4 million.

On the sales side, 11 companies reported 33 disposals worth HK$223 million. The number of companies and trades was down from the previous week's 13 companies and 49 disposals, but the value jumped from HK$103.7 million.

Buy-back activity rose for a fourth week, with 16 companies reporting 73 transactions worth HK$257 million. The figures were up from 14 companies and 59 trades valued at HK$108 million previously.

The bulk of the significant trades were purchases, with buy-backs in China Everbright and first-time purchases by directors in China Hanking and UKF. There were also buy-backs and insider purchases in Playmates.

Financial services provider China Everbright recorded its first buy-backs since October 2011, with 462,000 shares bought on September 3 and 4 at an average of HK$9.93 each. The trades were made on the back of the 36 per cent drop in the share price since January from HK$15.40.

The company acquired 3.58 million shares from September to October 2011 at an average of HK$8.12 each after the stock dropped from HK$21.90 in October 2010. The repurchases were timely as the counter rebounded by 82 per cent following those acquisitions to HK$14.76 in February last year.

The stock closed at HK$10.44 on Friday.

Executive director Xia Zhuo recorded his first trade in iron-ore concentrates producer China Hanking since the stock was listed in September 2011, with 40,000 shares purchased on August 28 and 29 at HK$1.40 each. The trades increased his holdings to 9.05 per cent of the issued capital.

The stock closed at HK$1.37 on Friday.

Chairman Wong Chun-chau recorded his first on-market trades in fur skins trader UKF since the stock was listed in August last year, with 6.3 million shares bought from August 30 to September 2 at 39 HK cents each. The trades increased his holdings to 56.08 per cent.

Also positive this year is non-executive director Jean-pierre Philippe with an initial 1.35 million shares bought from May 29 to June 11 at an average of 36.5 HK cents each.

Despite the sharp gain in the share price since listing, the purchases by these two directors indicate that the stock is still undervalued at the current price of 38 HK cents.

There were buy-backs and a purchase by chairman Thomas Chan Chun-hoo in toy manufacturer Playmates, with a combined 1.27 million shares bought from August 28 to September 2 at an average of HK$8.12 each.

The acquisitions were made on the back of an 11 per cent rise in the share price since July 19 from HK$7.30.

The company previously acquired 1.62 million shares from April 2 to July 15 at an average of HK$6.85 each and 575,000 shares from January 7 to February 7 at an average of HK$6.55 each. Prior to the repurchases this year, it acquired 23.9 million shares from June 2009 to September last year at an average of HK$2.93 each.

The stock closed at HK$8.42 on Friday.

Robert Halili is managing director of Asia Insider