Directors return to buying after lengthy absence as share prices rise
Hopefluent co-founders acquire 1.05 million shares at an average HK$2.89 each on the back of a 49 per cent rise in the stock price since January
Insider activity rose last week, with 50 companies recording 234 purchases worth HK$163 million versus 18 firms with 77 disposals worth HK$125 million.
The number of companies and trades on the buying side were up from the previous week’s 47 firms and 206 purchases. The buy value, however, was down from the previous week’s acquisitions worth HK$217 million, while sales were up from the previous week’s 15 companies, 71 disposals and HK$107 million.
Meanwhile, buyback activity fell, with 25 companies that posted 154 repurchases worth HK$771 million based on filings from June 30 to July 6. The figures were down from the previous 5-day totals of 28 firms, 179 trades and HK$870 million.
There was a common trading theme last week as several directors bought shares following steep gains in their companies’ share prices. Even more significant, the purchases were made following a lengthy absence by directors. Among the stocks that recorded insider buys on strong share price gains are Hopefluent Group Holdings, Chinney Investments and Forgame Holdings.
The most significant director transactions last week were in real estate agency and estate management services provider Hopefluent Group Holdings with purchases by the two co-founders of the company. Chairman Fu Wai Chung and his spouse, executive director Ng Wan acquired 1.05 million shares from July 3 to 5 at HK$2.80 to HK$2.97 each, an average of HK$2.89 each. The stock closed higher than these two directors’ purchase prices at HK$3.02 on Friday.
There are six significant points on the Hopefluent trades:
● The purchases by the two directors accounted for 11 per cent of the stock’s trading volume;
● This is the first time in the company’s history that the chairman and his spouse bought shares at the same time;
● Executive director Ng Wan recorded the most significant trade as her purchase of 692,000 shares at HK$2.93 each are her first on-market trades since listing;
● The purchases by Ng Wan boosted her stake by 83 per cent to 1.524 million shares or 0.23 per cent of the issued capital;
● The acquisitions by the two co-founders were made on the back of a 49 per cent rise in the share price since January; and
● The company announced in March a 40 per cent gain in annual profit to HK$318.684 million.
Meanwhile, chairman James Wong Sai Wing of property developer Chinney Investments purchased 240,000 shares on June 30 at HK$3.27 each. The trade increased his holdings to 349.483 million shares or 63.38 per cent of the issued capital. The stock climbed from the chairman’s purchase price to HK$3.53 on Friday.
There are four significant points about the Chinney Investments trades:
● The chairman recorded his first on-market trades since April 2016;
● The chairman recorded his highest acquisition price since 2008;
● The purchase was made on the back of a 92 per cent rise in the share price since May 2016 from HK$1.70; and
● The acquisition was made after the company announced on June 29 a 35.5 per cent gain in annual profit to HK$309.615 million.
Technology stocks have been hard hit of late, dragged down by intensive selling in heavyweight Tencent Holdings last week. The sell-off did not deter some directors of technology stocks from buying shares despite the steep climb in their share prices this year. The chairman and co-founder of webgames developer and publisher Forgame Holdings, Wang Dong Feng, picked up 491,000 shares from June 26 to July 4 at HK$14.00 to HK$14.58 each, or an average of HK$14.13 each. The trades increased his holdings to 22.664 million shares, or 16.4 per cent of the issued capital. The stock closed at HK$14.06 on Friday.
There are four significant points on the Forgame Holdings trades:
● The chairman recorded his first on-market trades since the stock was listed in October 2013;
● The trades accounted for 7 per cent of the stock’s trading volume;
● The purchases were made after the stock rose by as much as 101 per cent from HK$7.25 in April; and
● Despite the increase in the share price, the chairman’s purchase price was sharply lower than the IPO price of HK$55.
Robert Halili is managing director of Asia Insider