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SCMP Reporter

The market's recent volatility has highlighted the activities of directors who are trading with the sole purpose of supporting their company's share price.

 However, there are those who actively trade with the same objective as the average investor - to make a quick profit.

 What distinguishes these traders is their in-depth knowledge of the value and prospects of the company, the industry and familiarity with the movements of the share price.

 One director who fits this category is Ronald McAulay of CLP Holdings. He has been active in CLP shares in the past two months, acquiring 600,000 shares and selling 500,000 from January 9 to March 2.

 The transactions during the seven-week period netted him a profit of $780,000. The impressive feature of this was he was able to record respectable gains from slight movements in the share price.

 His strategy was simple - buy when the stock was slightly below $40 and sell when it was more than $40.20.

 Mr McAulay applied this strategy 18 times in the past two months, giving him an average profit of $97,500 per disposal.

 The range of his purchases was $38.40 to $39.80 while his selling range was $40.20 to $41.20 per share.

 Expect more buying from him in the near term as the stock is trading at $38.20.

 Another director who likes to trade in his company's shares is Barry Buttifant, the managing director of IDT International.

 Mr Buttifant's trading strategy is different from other directors in that he sells his entire holding before stocking up again, either through an exercise of share options or through the market.

 In the past year, he sold his entire holdings twice - in September and December.

 He also sold a significant portion of his holdings in August last year when he unloaded two million shares, leaving him with only 500,000 shares in the company.

  His trades have resulted in large gains in the past year. Last year, Mr Buttifant made more than $4.1 million in profit, buying low and selling high on 23 occasions.

 His average purchase price, which includes the price he paid for shares bought through an exercise of options, was 63 cents a share while his average disposal price was 85 cents. After unloading all his stock in December, Mr Buttifant is buying shares in IDT again.

 Since January 14, he has acquired 8.8 million shares worth $4.07 million. The purchases were made on the way up at 36 cents to 57 cents per share.

 He has continued to buy despite the shares more than doubling in price from 30 cents to 63 cents this year.

  This is the most aggressive the director has been in buying shares in the firm. Last year, 78 per cent of the 20.4 million shares he bought were acquired through an exercise of options.

 This year, however, all of the 8.8 million shares he has bought were acquired in the market.

 Elsewhere, Joseph Lau Luen-hung must be looking to finance something very big. The chairman of Chinese Estates Holdings has sold a whopping 117 million shares worth $304 million in the past three weeks.

 The disposals were made from February 17 to March 5 in 27 transactions. His most recent sale was 7.74 million shares at $2.71 each on March 5.

 Although the stock has risen by more than 50 per cent since January, it was surprising to see Mr Lau unload so many shares in such a short period.

 Historically, Mr Lau has bought heavily in Chinese Estates with purchases worth $3.14 billion since 1993.

 Mr Lau had recorded 155 purchases from July 1995 to July 21 last year. Robert Halili is director of Ownership Research Asia at Disclosure Inc.



Inside track reaps windfall for directors