The Insider | Has Hong Kong’s stock sell-off run too far? Property directors seem to think so
Share accumulation by directors of property companies is a potential sign that the share sell-off has been overdone, with many stocks now below fair value
Directors of property companies continued to dominate insider buying this week, reflecting the fifth straight week that the real estate sector has outpaced other sectors.
A total of 68 companies posted 391 transactions worth HK$1.278 billion (US$162.90 million) for the week ended Friday, down from the previous week’s 81 companies and 454 purchases. The buy value, however, was sharply up from the previous week’s acquisitions worth HK$840 million.
Directors of property developers and property-related companies took the top five spots in terms of insider share buying by value.
Agile Group Holdings chairman and founder, Chen Zhuolin, has been very active this month with 45.6 million shares bought from July 3 to July 18 worth HK$544 million. The purchases, which accounted for 31 per cent of the stock’s trading volume, were made at an average of HK$11.93 each.
The aggressive activity by the chairman this month indicates strongly that the stock is undervalued at current levels with a potential upside of 30 per cent based on the 950,000 shares that he acquired in April at HK$15.35 each. The chairman has a positive track record buying Agile shares since 2008 with three of his previous four buy clusters resulting in price gains within a one-year period. The stock closed at HK$11.70 on Friday.
