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.
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.
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.
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.
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