The InsiderInvestor euphoria in China Evergrande spills over to mainland property firms listed in Hong Kong
Overall insider activity was mixed last week as buying fell while selling rose
Heavy buy-back activity in the shares of mainland-based property companies and moves to lower mortgage rates in Shanghai provided a boost to the sector last week.
China Evergrande Group was the top buyer in terms of value on the Hong Kong exchange in July with a whopping 160.5 million shares worth HK$3.36 billion. The shares that were cancelled represented 1.22 per cent of its issued capital. The buy-backs were made from July 3 to 27 at HK$19.26 to HK$22.05 or an average of HK$20.94 each.
The group recorded buys on 15 out of the 19 trading days during that period. The buy-backs also accounted for 25 per cent of the stock’s trading volume.
The company bought back heavily in anticipation of bumper first-half earnings, which the group duly announced on August 6. The stock surged following that positive profit alert by as much as 27 per cent from the company’s buy-back prices to an intraday high of HK$26.45 before closing at HK$25.20 on Tuesday.
Shareholders of China Evergrande Group can rejoice as the stock is sharply up following the heavy buy-backs by the company in the past month. Not only that, the shares that were cancelled will translate into a higher payout from the special dividend the group plans to distribute to shareholders at its upcoming board meeting on August 20.