The Insider

Net buying activity by insiders little changed on week, while net selling weakens

This past week saw share buybacks in CAR Inc, Goldpac Group, New World Development MIT Holdings; L’Occitane International S.A. recorded its first share buybacks since March

PUBLISHED : Sunday, 12 June, 2016, 2:45pm
UPDATED : Monday, 16 January, 2017, 10:28am

The buying was flat while the selling among directors fell for the first time in the past three weeks based on filings on the Exchange during the holiday-shortened week of June 6 to 10. A total of 29 companies recorded 142 purchases worth HK$153 million versus 12 firms with 43 disposals worth HK$48 million. The buy figures were consistent with the previous week’s five-day totals of 33 companies, 188 purchases and HK$182 million. The sales, on the other hand, were sharply down from the previous week’s 17 firms, 78 disposals and HK$96 million.

Meanwhile, the buyback activity surged after falling for two straight weeks with 17 companies that posted 71 repurchases worth HK$164.7 million. The number of firms and trades were up from the previous week’s 15 companies and 64 repurchases while the value was slightly down from the previous week’s buybacks worth HK$179 million.

There were several significant purchases last week with buybacks in CAR Inc. and Goldpac Group following the steep fall in their share prices. Meanwhile, L’Occitane International resumed buying back after announcing its annual results. On the directors’ side, there were more buys by a director of blue chip New World Development and a first-time buy by the chairman of recently-listed SMIT Holdings at sharply below the IPO price.

Car rental firm CAR Inc. bought back for the first time since listing in September 2014 with 10 million shares purchased from June 6 to 8 at HK$7.26 to HK$7.77 each or an average of HK$7.54 each. The trades, which accounted for 25 per cent of the stock’s trading volume, were made after the stock fell by as much as 63 per cent from HK$19.80 in May 2015. Despite the fall in the share price, the company’s purchase prices were within the IPO price of HK$7.50 to HK$8.50. Investors should note that Chairman & CEO Charles Lu Zheng Yao acquired 300,000 shares in March and 4 million shares in January at HK$11.54 to HK$8.25 each or an average of HK$11.12 each. The trades increased his adjusted holdings to 699.425 million shares or 29.21 per cent of the issued capital. He previously acquired 6.7 million shares in September 2015 at an average of HK$12.14 each and 11.48 million shares in July 2015 at an average of HK$14.03 each. The stock closed at HK$7.52 on Friday.

Financial and smart cards manufacturer and supplier Goldpac Group resumed buybacks after the stock fell by 64 per cent from its acquisition prices in the first quarter last year with 565,000 shares purchased on June 7 at HK$2.39 each. The Group previously acquired 824,000 shares from February to March 2015 at HK$4.89 to HK$3.85 each or an average of HK$4.58 each. The repurchases since 2015 are the company’s first buybacks since listing in December 2013. The Group’s purchase prices were lower than the IPO price of HK$5.39. The stock closed at HK$2.31 on Friday.

Natural and organic cosmetics retailer L’Occitane International S.A. picked up where it left off in March with 4,000 shares purchased on June 7 at HK$13.50 each. The acquisition was unusual as the shares bought were significantly below the 442,000 shares that the group repurchased on average per day since it started its buyback programme in 2011. The recent buyback was made after the Company announced on June 6 a 9.6 per cent drop in net profit to €HK$113.56 million. The Group previously acquired 2.63 million shares from January 27 to March 29 at HK$12.61 to HK$14.94 each or an average of HK$12.96 each and 6.65 million shares from November to December 2011 at an average of HK$14.44 each. Investors should note that Chairman & CEO Reinold Geiger purchased 2.5 million shares from January 27 to February 17 at HK$12.70 to HK$14.94 each or an average of HK$12.90 each. The trades increased his holdings to 1.031 billion shares or 69.85 per cent of the issued capital. He previously acquired 337,000 shares in November 2015 at an average of HK$15.43 each. The stock closed at HK$15.76 on Friday, sharply higher than the group’s last buyback price.

Non-Executive Vice Chairman William Doo Wai Hoi picked up where he left off in blue chip infrastructure and property play New World Development in March with 1.1 million shares purchased from May 31 to June 6 at an average of HK$7.41 each. The trades increased his holdings to 108.575 million shares or 1.16 per cent of the issued capital. He previously acquired 67.1 million shares from February 26 to March 10 at average of HK$7.01 each and 30 million shares from January 18 to 22 at an average of HK$6.52 each. Prior to his purchases this year, the director acquired 5 million shares in April 2014 at an average of HK$1.76 each. Note that the quoted transaction prices in the filings were below the stock’s market prices on those days of HK$7.95 to HK$8.14. Investors should note that the stock rose by an average of 17 per cent three months after the vice chairman bought shares based on 27 purchases since 2014. The stock recorded a price gain three months after on 100 per cent of those acquisitions. The stock closed at HK$7.54 on Friday.

Chairman Huang Xueliang recorded the first corporate shareholder trades in security devices provider SMIT Holdings since the stock was listed on March 30 with 1.6 million shares purchased on May 31 at HK$3.18 each. The trade increased his holdings to 43.607 million shares or 14.54 per cent of the issued capital. The purchase was made at 16 per cent below the IPO price of HK$3.78. The stock closed lower from the Chairman’s purchase price to HK$2.88 on Friday.

Robert Halili is managing director of Asia Insider