Buying activity among directors rises for third week
Investors should exercise caution towards HSBC as it winds down share buybacks; notable insider buying activity recorded at six other companies
Buying among directors rose for the third straight week while selling fell, based on stock exchange filings from December 19 to 23. A total of 62 companies recorded 371 purchases worth HK$924 million versus 16 firms with 45 disposals worth HK$75 million.
The number of companies and trades on the buying side were sharply up from the previous week’s 41 firms and 275 purchases. The buy value, however, was sharply down from the previous week’s acquisitions worth HK$2.23 billion. On the selling side, the number of companies was up from the previous week’s 11 firms but the number of trades and value were down from the previous week’s 53 disposals worth HK$110 million.
Meanwhile, the buyback activity remained high with 37 companies that posted 162 repurchases worth HK$679 million based on filings from Monday to Thursday. The number of firms and trades were consistent with the previous week’s five-day totals of 40 companies and 199 transactions. The value, however, was sharply down from the previous week’s turnover of HK$3.04 billion.
The huge fall in the buyback value was mainly due to HSBC Holdings as the group acquired a paltry 10,000 shares on December 19 worth HK$0.65 million. That lone trade by HSBC last week was not surprising as the group has nearly reached its buyback goal of HK$19.5 billion for the second half of this year. HSBC embarked on this buyback spree five months ago, picking up 325.3 million shares (via the London Stock Exchange) from August 4 to December 19 worth HK$19.4 billion.
Investors should therefore trade with caution on HSBC shares in the near-term
The trades accounted for 11.4 per cent of the blue chip’s trading volume. The group also bought shares on 90 out of the 95 trading days during that period. The stock rose sharply during that period from HK$52.92 in August to a high of HK$66.50 this month. The buyback by the group of 10,000 shares on December 19 is a strong sign that this recent buyback programme is over as the shares bought is significantly lower than the 3.53 million shares that HSBC bought back on average per day from August 4 to December 16.