The Insider | Investor 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.