Tencent director leads disposals in sluggish trade

Fund managers accumulate holdings in cement firms in the wake of sharp falls in share prices

PUBLISHED : Monday, 02 June, 2014, 3:07am
UPDATED : Monday, 02 June, 2014, 3:07am

Buying fell for a second week while selling among directors slowed after rising for two consecutive weeks, based on filings on the exchange in the last week of May.

During the week, 23 firms recorded 153 purchases worth HK$168 million, compared with seven firms with 20 disposals worth HK$123 million. The buy figures were down from the previous week's 28 companies, 208 purchases and HK$191 million. On the selling side, the number of firms and trades was sharply down from 12 companies and 47 disposals.

But the sell value was sharply up from HK$38 million previously, mainly due to disposals by executive director Martin Lau Chi-ping in internet giant Tencent Holdings worth HK$112 million. Shareholders should not fret, however, as the blue chip tends to rise whenever its directors unload shares. In Lau's case, shares in Tencent rose by an average of 20 per cent six months after he sold, based on 136 disposals since 2007.

The stock closed at HK$109.30 on Friday.

There was heavy fund manager activity in cement plays following the sharp fall in share prices this quarter with purchases in Anhui Conch Cement, Asia Cement (China) Holdings and West China Cement.

Capital Group acquired 3.95 million shares of Anhui Conch in a filing on May 23 at HK$26.93 each. The trade increased its holdings to 10.08 per cent of the issued capital. The group previously acquired 13 million shares from April 23 to 30 at HK$29.95 to HK$28.70 each and 5.54 million shares in a filing on April 22 at HK$30.11 each.

The stock closed at HK$27.90 on Friday.

Invesco Hong Kong became a substantial shareholder of Asia Cement on May 23 following the purchase of 1.03 million shares at HK$5.01 each. The trade increased its holdings to 5.04 per cent.

The initial filing was made on the back of the 24 per cent drop in the share price since April from HK$6.63. Despite the fall in the share price, the counter is still up since July 2013 from HK$3.17.

The stock closed at HK$5.23 on Friday.

FIL boosted its stake in West China Cement back to 5 per cent of the issued capital at sharply lower than its exit price in May 2013. The group reported an initial filing (for the second time since December 2012) on May 23 of 4.9 million shares at 78 HK cents each.

The initial filing was made on the back of the 29 per cent drop in the share price since April from HK$1.10. The counter is also sharply down since December 2013 from HK$1.30.

The group ceased to be a substantial shareholder in May 2013 following the sale of 1.19 million shares at HK$1.33 each, which lowered its interest to 4.99 per cent.

Investors should note that the company repurchased 29.9 million shares from April 8 to May 5 at 81 HK cents to HK$1.05 each, lower than the initial public offering price of HK$1.69, in its first buy-backs since the stock was listed in August 2010.

The counter closed at 77 HK cents on Friday.

Robert Halili is managing director of Asia Insider