Directors take advantage of share price increases on Hong Kong stock exchange to reduce stakes

There were several significant director trades on the Hong Kong stock exchange last week following the rise in share prices with insider buys in Dah Chong Hong Holdings and Road King Infrastructure and sales in Great Harvest Maeta Group and China Gas Holdings.

Although the buying fell, selling among directors rose for the second straight week based on exchange filings from March 12 to 16.

A total of 13 companies recorded 56 purchases worth HK$39 million versus nine firms with 34 disposals worth HK$60 million.

The buy figures were down from the previous week’s 16 companies, 69 purchases and HK$121 million. The sales, on the other hand, were up from the previous week’s eight firms, 29 disposals and HK$57.5 million.

Aside from directors, the buy-back activity fell with seven companies that posted 26 repurchases worth HK$152 million based on filings from March 9 to 15. The number of firms and trades were down from the previous five-day total of eight companies and 36 repurchases. The value, however, was sharply up from the previous week’s turnover of HK$132 million.

Lai Ni-hium, CEO of the motor vehicle distributor and logistics services provider Dah Chong, bought 150,000 shares on March 12 at HK$3.99 each. The trade increased his holdings to 707,000 shares or 0.04 per cent of the issued capital. He previously acquired 7,200 shares in October 2017 at HK$3.86 each, 100,000 shares in August 2017 at HK$3.93 each and 250,000 shares in March 2017 at HK$3.23 each. Before his trades since 2017, Lai acquired an initial 200,000 shares in June 2016 at HK$3.67 each.

The stock closed at HK$4.28 on Friday.

The recent purchase was made on the back of a 14 per cent rise in the share price since December 2017 from HK$3.49

The recent purchase was made after the company announced on March 8 a 56.9 per cent gain in year-end profit of HK$802 million.

Derek Zen Wei-peu, co-chairman of Road King Infrastructure, bought one million shares of the tollway operator from March 9 to 13 at HK$16.38 to HK$16.50 each or an average of HK$16.42. The trades increased his holdings to 20.64 million shares or 2.76 per cent of the issued capital. He previously acquired 2.63 million shares from November 1 to December 13, 2017 at HK$12.86 to HK$12.39 each or an average of HK$12.73 each, 1.02 million shares in April 2017 at HK$11.12 each and 2,000 shares in November 2016 at HK$6.49 each. The stock closed at HK$16.66 on Friday.

The buying by Zen were his first on-market trades since December 2017 and accounted for 15 per cent of the stock’s trading volume last week.

Cao Jiancheng, executive director of shipping firm Great Harvest Maeta Group, sold 500,000 shares from March 8 to 12 at HK$1.70 each, which reduced his holdings by 6 per cent to 7.8 million shares or 0.84 per cent of the issued capital. The group announced its interim results in November 2017 with a loss of US$1.889 million which was less than the loss of US$20.068 million in the same period in the previous year.

The stock closed at HK$1.70 on Friday.

It must be noted that the disposals were made on the back of a 45 per cent rebound in the share price since December from HK$1.17.

Ma Jin-long, executive director of natural gas pipeline infrastructure operator China Gas Holdings, sold 415,000 shares from March 12 to 15 at HK$23.81 to HK$24.50 each or an average of HK$24.05. The trades reduced his holdings to 2.8 million shares or 0.06 per cent of the issued capital.

He previously sold 784,000 shares in February 2014 at HK$11.98 to HK$12.32 each or an average of HK$12.29 each and 11.2 million shares from October 2009 to October 2013 at HK$3.30 to HK$8.55 each or an average of HK$4.85 each. The stock closed at HK$25.30 on Friday.

The recent sales were made after the stock rose by as much as 105 per cent from Ma’s previous disposal in 2014.