Retailer I.T leads way with buy-backs

Chairmen of mainland property plays Sinolink Worldwide and CIFI also catch the buying spirit

PUBLISHED : Monday, 09 June, 2014, 3:29am
UPDATED : Monday, 09 June, 2014, 3:29am

Last week saw several significant corporate shareholder trades, including retailer I.T buying back for the first time since its listing after a strong run-up in the share price.

On the directors' side, Sinolink Worldwide chairman Ou Yaping recorded his first purchases in the firm since 2007.

At CIFI, purchases by chairman Lin Zhong in May accounted for nearly half the stock's trading volume. On the negative side, Ju Teng International chairman Cheng Li-yu sold shares for the first time since the company's listing, at higher than his acquisition prices.

Fashion retailer I.T's buy-backs of 1.16 million shares on Thursday and Friday came at an average price of HK$2.66 each - the first since its March 2005 listing. The buy-backs, surprisingly, were made after the stock rebounded by 44 per cent from HK$1.85 in January. Despite the gains, the stock is still down since August 2011 from HK$7.87. The shares closed at HK$2.70 on Friday.

At Sinolink Worldwide, Ou's trades were his first in the mainland developer since 2007, with 28.4 million shares purchased from May 28-30 at 62 HK cents each. The trades increased the chairman's holdings to 1.596 billion shares or 45.08 per cent of the issued capital. The trades followed a 24 per cent drop in the share price since October 2013 from 82 HK cents. He previously acquired 2.4 million shares from February to March 2007 at an average of HK$1.66 each. The counter closed at 66 HK cents on Friday.

CIFI chairman Lin recorded buys in the mainland property play on every day last month, with 35.8 million shares picked up from May 2-30 at an average of HK$1.44 each. The trades, which accounted for 46 per cent of the stock's trading volume, increased his holdings to 3.255 billion shares or 54.03 per cent. He bought 9.4 million shares from May 26-30 at an average of HK$1.46 each. Before his trades in May, the chairman acquired seven million shares from March 14 to April 15 at an average of HK$1.52 each and two million shares in October last year at HK$1.44 each.

The purchases by Lin since October 2013 are the first corporate shareholder trades in the firm since the stock was listed in November 2012. The purchase prices were higher than the initial public offering price of HK$1.33. The stock closed at HK$1.39 on Friday.

At computer parts manufacturer Ju Teng, Cheng sold shares for the first time since the stock was listed in 2005, with 15.15 million shares May 26 to June 3 at an average of HK$6.02 each. The trades, which accounted for 47 per cent of the stock's trading volume, reduced the chairman's holdings to 322.009 million shares or 27.58 per cent.

The disposals came after a 24 per cent rise in the share price since December 2013 from HK$4.86. The sales were made at a profit, based on the 74.3 million shares he acquired from November 2006 to December 2013 at HK$1.27 to HK$5.34 each, or an average of HK$2.41.

Executive director Huang Kuo-kuang also showed negative sentiment selling 650,000 shares on May 16 at HK$6.02 each. The trade lowered his stake to 9.231 million shares or 0.79 per cent.

He sold 2.8 million shares from September to December 2009 at HK$6.85 each and 10.8 million shares from July to September 2007 at HK$3.54 each. Investors should note that Ju Teng shares fell by an average of 18 per cent six months after Huang sold shares, based on those 29 disposals from 2007 to 2009. The stock recorded a price fall six months later on 79 per cent of those sales. The shares closed at HK$6.24 on Friday.

Robert Halili is managing director of Asia Insider