The Insider
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Company directors snap up shares at natural gas firms, as insider buying gains momentum for third week

Insider buying rose for the third straight week while the selling was up for the second straight week based on filings on the Hong Kong stock exchange from August 27 to 31

PUBLISHED : Sunday, 02 September, 2018, 7:08pm
UPDATED : Sunday, 02 September, 2018, 7:49pm

Directors of natural gas providers have been active in adding to their shareholdings in the past month, with purchases seen in a number of energy majors ahead of the cooler autumn temperatures.

This comes as insider buying rose for the third straight week while the selling among directors was up for the second straight week based on filings on the Hong Kong stock exchange from August 27 to 31.

A total of 55 companies recorded 286 purchases worth HK$443 million (US$56.45 million) versus 14 firms with 47 disposals worth HK$70 million. The figures were up from the previous week’s 46 companies, 178 purchases and HK$290 million on the buying side and 8 firms, 29 disposals and HK$54 million on the selling side.

China Gas Holdings managing and founder Liu Ming-hui and executive director Huang Yong acquired a combined 1.45 million shares of China Gas Holdings on August 17 at an average of HK$25.71 each.

The purchases were made after the stock fell by 30 per cent from June 5.

Meanwhile, Gas Blue Sky Holdings chairman Cheng Ming-kit bought 3.92 million shares on August 30 at 52 HK cents. The trade increased his holdings to 1.439 billion shares or 11.59 per cent of the issued capital. The purchase was made after the company announced a 193 per cent gain in first-half profit to HK$78.7 million.

China Oil And Gas Group chairman Xu Tie Liang bought 1.04 million shares at 61 HK cents each. The trade increased his holdings to 1.433 billion shares or 24.55 per cent of the issued capital. The purchase was made after the company announced on a 45 per cent gain in first half profit.

Still, the most significant acquisition in the natural gas sector was by Bank of East Asia chairman David Li Kwok-po in The Hong Kong and China Gas Company. Li, who is an independent non-executive director of the blue chip utility firm, broke his 10-year trading drought by purchasing 2.6 million shares at an average of HK$15.94 each. The trades increased his holdings to 45.515 million shares or 0.30 per cent of the issued capital. The purchases, surprisingly, were made after the stock rose by 57 per cent from HK$10.16 in January 2016. The rare acquisitions by Li strongly indicate that the stock is undervalued at last week’s closing price of HK$16.16 per share.

On the buy-back front, there were repurchases in mainland-based Shimao Property Holdings and Fosun International following the announcement of earnings results. Shimao Property Holdings repurchased 5.1 million shares at an average of HK$22.92 each. The buy-backs were made after the company announced a 20.2 per cent gain in first-half profit.

Among mainland property companies that have bought back shares, Shimao Property Holdings is a considerably safer bet than Country Garden Holdings following recent news of the ill-fated Forest City development in Malaysia and multiple workplace deaths at a construction site in Anhui. Country Garden Holdings recently bought back 4 million shares on August 30 to help shore up its ailing share price at HK$11.82 each.

Meanwhile, pharmaceutical and health care products manufacturer Fosun International bought back 2.5 million shares at an average of HK$14.49 apiece. The buy-backs were made after the company announced on a 16.9 per cent gain in first-half profit to 6.858 billion yuan. The recent buy-backs indicate a strong positive outlook by management, especially after chairman Guo Guangchang announced that the group will continue its overseas acquisitions. Shares of Fosun closed at HK$14.20 on Friday.

Perhaps the most interesting buy-back in the market last week was by traditional Chinese tea-product seller and distributor Tenfu (Cayman) Holdings, as the group bought shares following a sharp gain in its share price. The company bought back for the first time since listing in September 2011, acquiring 1.13 million shares at an average of HK$5 apiece. The repurchases were made on the back of the 130 per cent rise in the share price since September 2016. Despite the sharp rise, the group’s buy-back price was lower than the IPO price of HK$6.80. The trades were also made after the Company announced a 12.8 per cent gain in first-half profit to 130.034 million yuan. The stock closed at HK$5.19 on Friday.

Robert Halili is managing director of Asia Insider

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