Buyback of stocks jumps again in Hong Kong

Insider activity surged based on filings on the Hong Kong stock exchange from March 28 to April 1 with 21 companies that recorded 113 purchases worth HK$238 million versus 11 firms with 47 disposals worth HK$247 million. The figures were sharply up from the previous week’s four-day totals of 14 companies, 58 purchases and HK$27 million on the buying side and four firms, nine disposals and HK$20 million on the selling side.

Meanwhile, the buyback activity rose for the second straight week with 20 companies that posted 79 repurchases worth HK$202 million. The number of firms and trades were up from the previous week’s 15 companies and 63 repurchases. The value, however, was sharply down from the previous week’s turnover of HK$368 million.

The bulk of the significant trades last week were purchases with buybacks in SEA Holdings and insider buys in Henderson Land, Brightoil Petroleum and China Health Group.

Property management firm SEA Holdings recorded its highest acquisition prices since it started its buyback programme in November 1999 with 150,000 shares purchased from March 29 to April 1 at HK$20.05 to HK$21.50 each, or an average of HK$20.73 each. The trades were made on the back of the 39 per cent rise in the share price since the last week of January from HK$14.90.

The acquisitions were also made after the company announced on March 24 a 109.79 per cent gain in year-end profit to HK$1.435 billion. The group previously acquired 2.48 million shares from January 11 to 22 at HK$13.08 to HK$15.60 each, or an average of HK$14.55 each. Prior to the repurchases this quarter, the company acquired 30.8 million shares from July 2014 to December 2015 at HK$4.63 to HK$12.80 each, or an average of HK$7.61 each, 31 million shares from January 2009 to July 2011 at HK$2.26 to HK$5.55 each, or an average of HK$3.24 each and 44.5 million shares in November 1999 at HK$2 each. The stock closed at HK$21.60 on Friday.

Chairman Lee Shau Kee resumed buying shares of blue chip property developer Henderson Land Development after the stock rebounded by 23 per cent from HK$37.70 on January 21 with 3.634 million shares purchased from March 22 to 24 at HK$46.36 each. The trades, which accounted for 11 per cent of the stock’s trading volume, increased his holdings to 2.393 billion shares, or 72.39 per cent, of the issued capital. The purchases were also made after the company announced on March 21 a 29 per cent gain in year-end profit to HK$21.874 billion.

The chairman previously acquired 11.25 million shares from January 4 to 20 at an average of HK$41.72 each. Prior to his trades this quarter, the chairman acquired 251.6 million shares from August 2012 to December 2015 at HK$41.94 to HK$64.50 each, or an average of HK$51.93 each and 131.6 million shares from October 2001 to May 2012 at HK$24.93 to HK$58.25 each, or an average of HK$46.72 each. The stock closed at HK$47.20 on Friday.

Purchases by chairman and CEO Sit Kwong Lam in oil and gas exploration firm Brightoil Petroleum since the last week of February totaling 20.275 million shares accounted for 21 per cent of the stock’s trading volume. The purchases were made from February 29 to March 29 at HK$1.92 to HK$2.05 each, or an average of HK$1.96 each. The chairman recorded buys on 10 out of the 20 trading days during that period.

He last bought 500,000 shares on March 29 at HK$2 each, which increased his holdings to 7.455 billion shares, or 73.4 per cent of the issued capital. The acquisitions in the past six weeks were made after the stock fell by up to 16 per cent from HK$2.38 on February 2. The purchases were also made after the company announced on February 26 a first-half loss of HK$522.956 million versus a profit of HK$561.141 million in the same period in 2014.

The chairman previously acquired 22.8 million shares from January 6 to 26 at HK$2.37 each, 9.7 million shares in December 2015 at HK$2.27 each and 41.5 million shares from May to July 2015 at HK$2.33 to HK$3.41 each, or an average of HK$2.70 each. The stock closed higher from the chairman’s last purchase price to HK$2.44 on Friday.

Chairman William Guo Xia picked up where he left off in pharmaceutical services provider China Health Group in January with 1.72 million shares purchased on March 21 at HK$0.19 each. The trade increased his holdings to 659.371 million shares, or 72.04 per cent of the issued capital. The acquisition was made on the back of the 27 per cent rebound in the share price since February from HK$0.15.

He previously acquired 2.3 million shares on January 12 at HK$0.21 each. Prior to his trades this quarter, the chairman acquired 24.5 million shares from January 2 to 30, 2015 at HK$0.123 each and 1.8 million shares in December 2014 at HK$0.10 each. The counter closed at HK$0.198 on Friday.

Robert Halili is the managing director of Asia Insider