Food and beverage buybacks strong due to low share prices

The director activity remained high with 49 companies that recorded 264 transactions worth HK$1.72 billion based on filings on the exchange from October 20 to 24. The figures were consistent with the previous week's 57 firms, 258 trades, and HK$1.27 billion. A total of 39 companies recorded 214 purchases worth HK$821 million last week versus 11 firms with 50 disposals worth HK$899 million.

Aside from directors, the buyback activity remained high with 16 companies that posted 87 repurchases worth HK$514 million. The number of firms was slightly down from the previous week's 18 companies while the number of trades and value were up from the previous week's 79 repurchases worth HK$204 million.

The buying was high in food and beverage stocks due to sharp fall in share prices in this sector in the past year. There were more buybacks by China Huishan Dairy last week along with insider buys in Changshouhua Food, China Modern Dairy, and YuanShengTai Dairy Farm.

Dairy products producer China Huishan Dairy was a lead story last week following initial buybacks of 15.4 million shares from October 15 to 17 at an average of HK$1.75 each. Those were the group's first buy-backs since listing in September 2013. The group ramped up its activity last week with a further 25.75 million shares purchased from October 20 to 22 at an average of HK$1.76 each.

Overall, the group has bought back 41.2 million shares in the past two weeks worth HK$72 million. The buy-backs were hefty as they accounted for 26 per cent of the stock's trading volume. The company's buy-back price was sharply lower than the initial public offering price of HK$2.67. The stock closed at HK$1.77 on Friday.

Chairman and chief executive Wang Mingxing acquired shares of edible corn oil products producer Changshouhua Food at higher than his sale price in June 2013 with 2.7 million shares purchased from October 13 to 21 at HK$6.01 to HK$6.25 each or an average of HK$6.10 each. Although the shares were acquired this month at higher than Wang's sale price last year, the purchases were made on the back of the 26 per cent drop in the share price since June from HK$8.19. The counter is also sharply down since December 2013 from HK$10.04. The stock closed at HK$6.40 on Friday.