The Insider

Lai Sun Development’s chairman makes first buy-back since Asian financial crisis of 1997

Property developer’s shares have jumped close to 200pc since February 2016

PUBLISHED : Sunday, 03 December, 2017, 5:27pm
UPDATED : Sunday, 03 December, 2017, 10:41pm

Buying on the Hong Kong stock exchange fell for the first time in four weeks while selling among directors declined for the second straight week, based on filings from November 27 to December 1.

Buyers outweighed sellers with 59 companies recording 255 purchases worth HK$321 million versus 11 firms with 37 disposals worth HK$64 million. The number of companies on the buying side was unchanged while the number of trades and value were sharply down from the previous week’s 336 purchases worth HK$574 million. On the selling side, the number of firms and trades were down from the previous week’s 16 companies and 41 disposals. The sell value, however, was sharply up from the previous week’s HK$24 million.

While the buying by directors slowed last week, the buy back activity remained high with 25 companies posting 126 repurchases worth HK$231 million, based on filings from November 24 to 30. The number of firms and trades were slightly up from the previous five-day totals of 24 companies and 118 repurchases. The value, however, was sharply down from the previous week’s turnover of HK$623 million.

The bulk of the significant trades last week included rare insider buys in Lai Sun Development, Modern Dental Group and Man Wah Holdings.

The most notable trade was in Lai Sun Development, as its chairman made his first purchases since the Asian curenty crisis of 1998. Peter Lam Kin-ngok bought 102,000 shares from November 22 to 28 at HK$13.44 to HK$13.50 each or an average of HK$13.46 each. The trades increased Lam’s holdings to 323.551 million shares or 53.47 per cent of the issued capital. He had previously acquired 4.6 million shares in January 1998 at an average of HK$1.18 each and HK$110 million worth of shares from January 1994 to October 1996. It is worth noting that the shares have jumped by nearly 200 per cent from HK$4.55 in February 2016 to its close at HK$13.88 on Friday.

Meanwhile, Chan Kwun-fung, executive chairman of dental prosthetic maker Modern Dental, bought 477,000 shares on November 28 at HK$2.14 each – his first this year. The trade increased his holdings to 473.383 million shares or 47.33 per cent of the issued capital. Kwun previously acquired 663,000 shares from November 29 to December 6, 2016, at an average of HK$2.48 each and nearly 3 million shares from January to May 2016 at an average of HK$3.00 each. Chief executive Ngai Shing-kin too has increased his holdings in the company this year. He acquired 1.25 million shares on January 26 at HK$3.09 each, which boosted his stake to 98.041 million shares or 9.8 per cent. Shing previously acquired 162,000 shares from December 5 to 6, 2016, at HK$2.47 each.

The purchases made by the two executives were lower than the initial public offering price of HK$3.40 to HK$4.90 in December 2015. The stock closed at HK$2.10 on Friday.

Another significant trade by a company insider was made by Wong Man-li, chairman and managing director of leading Chinese furniture exporter Man Wah Holdings, who bought 2 million shares on November 29 at HK$6.53 each. The move increased his holdings to 2.439 billion shares or 64.01 per cent of the issued capital. He previously acquired 50 million shares in March 2016 at HK$4.03 each, 14 million shares in May 2015 at HK$4.44 each and 23.2 million shares from June 2011 to July 2012 at HK$4.16 to HK$1.42 each or an average of HK$2.56 each.

Investors should note that the company bought back 36.5 million shares from February 3 to June 16 at HK$4.74 to HK$7.00 each or an average of HK$6.16 each. Before the buy-backs this year, the group acquired 386.3 million shares from November 2011 to November 2016 at HK$1.39 to HK$7.30 each or an average of HK$3.43 each.

The recent purchase by Man was made after the stock fell by as much as 24 per cent from HK$8.60 on October 23. The stock closed at HK$6.82 on Friday.

Robert Halili is managing director of Asia Insider