THE stock market remained depressed last week with the Straits Times Index rising a mere 22.3 points to close at 3,001.81 on Friday, leaving the bourse down by nearly 6 per cent this month.

The weak market sentiment prompted directors of several listed firms to provide some price support, with most of the buyers picking up shares at sharply lower than their previous purchase prices. Among the firms with directors who bought at lower prices last week were Bonvests Holdings, Ho Bee Investment, Sim Lian Group, and Yangzijiang Shipbuilding.

Funds had a different take on the market as the correction prompted some asset managers to bail out instead of averaging down on their acquisitions. Aegis Portfolio Managers, for instance, sold shares for the first time in Ellipsiz, cutting its stake by 54 per cent to 4.6 per cent.

Bonvests Holdings

Chairman and managing director Henry Ngo resumed buying shares of investment holding firm Bonvests Holdings at below his acquisition prices last year, with 494,000 shares purchased from May 23 to June 16 at an average of $1.11 each. The trades, which accounted for 62 per cent of the stock’s trading volume, increased his holdings to 328.2 million shares or 81.6 per cent of the issued capital.

He previously acquired 200,000 shares in August 2007 at an average of $1.30 each. Although the chairman resumed buying at a lower price, his recent trades were made at higher than his purchase prices from 2004 to 2006, based on the 5.8 million shares that he acquired during that period at 48 cents to 92 cents each.

The group announced its Q1 results on May 14 with net profit up by 115.6 per cent to $20.46 million for the three months to March 31, 2008. The stock closed at $1.09 on Friday.

Ho Bee Investment

Executive director Desmond Woon Choon Leng and independent director Chin Yoke Choong have resumed buying shares of property play Ho Bee Investment at lower than their previous purchase prices. Mr Woon picked up 100,000 shares last Wednesday at 83 cents each, which increased his direct holdings to 1.7 million shares. He previously acquired 400,000 shares on May 27 and 28 at an average of 95 cents each, and 150,000 shares on Jan 23 at $1.15 each.

Prior to the acquisitions this year, Mr Woon sold one million shares in March 2007 at an average of $2.12 each and 100,000 shares in August 2005 at 53 cents each. Mr Chin, on the other hand, purchased 50,000 shares on June 4 at 93 cents each, which doubled his direct stake to 100,000 shares. He previously acquired 20,000 shares on Jan 22 at $1.15 each and an initial 30,000 shares in December 2007 at $1.54 each.

Also positive earlier this year was chairman and chief executive officer Chua Thian Poh with 2.4 million shares purchased from Jan 23 to March 14 at $1.23 to 90 cents each, which increased his stake to 464.1 million shares or 62.9 per cent. He previously acquired five million shares from June 2003 to November 2007 at 21 cents to $1.82 each.

The stock closed at 86 cents on Friday.

Sim Lian Group

Chairman Kuik Ah Han acquired more shares of building construction and property developer Sim Lian Group at a lower price with 477,000 shares purchased from last Wednesday to Friday at 48 cents each. The trades, which accounted for nearly 100 per cent of the stock’s trading volume, increased his holdings to 296.8 million shares or 52.3 per cent.

He previously acquired nearly six million shares from Feb 20 to April 3 at an average of 51.8 cents each, and 1.3 million shares from August to November 2007 at an average of 67 cents each. The chairman’s purchases this year were made after the company announced on Feb 13 a 162.6 per cent gain in H1 profit to $20.64 million for the six months to Dec 31, 2007.

Aside from the chairman, there were also purchases by deputy managing director Kuik Sin Pin, deputy chairman and managing director Kuik Thiam Huat, and executive director Kuik Sin Leng earlier this year.

Mr Kuik Sin Pin bought 671,000 shares from Feb 15 to April 16 at an average of 52.2 cents each, which boosted his direct stake by 12 per cent – to 6.1 million shares or 1.07 per cent. Mr Kuik Thiam Huat, on the other hand, bought 200,000 shares on Feb 14, which increased his direct holdings to 26.9 million shares or 4.7 per cent. He previously acquired 200,000 shares in August 2007 at 69 cents each. And Ms Kuik Sin Leng purchased 150,000 shares on May 13 at 48 cents each, which increased her direct interest by 20 per cent to 905,000 shares. That was her first trade since listing. 

The stock closed at 50 cents on Friday.

Yangzijiang Shipbuilding

There were more insider buys and buybacks in commercial vessel and container ships manufacturer, Yangzijiang Shipbuilding, at lower prices. Non-executive director Teo Yi-dar acquired more shares a sharply lower than his initial purchase price in January with 50,000 shares purchased last Thursday at 91 cents each. The trade doubled his direct holdings to 100,000 shares. He previously acquired an initial 50,000 shares on Jan 21 at $1.39 each.

The company, on the other hand, repurchased one million shares on June 9 at 94 cents each. The group previously acquired 10.6 million shares from May 2 to 23 at an average of $1.04 each. The trades by the group since May were its first buybacks since listing in April 2007.

There were also initial purchases by chairman Ren Yuanlin and deemed substantial shareholder Ren Jinhua earlier this year. Mr Ren Yuanlin acquired an initial 300,000 shares (direct) from Feb 29 to March 5 at $1.08 to $0.95 each. He also has deemed interest of 1.067 billion shares or 32.3 per cent. Those were his first on-market trades since the group’s listing. Mr Ren Jinhua, on the other hand, acquired an initial one million shares on March 5 at an estimated price of 94 cents each.

The stock closed at 91 cents on Friday.

Ellipsiz

Aegis Portfolio Managers Pte Ltd ceased to be a substantial shareholder of engineering and advanced packaging solutions provider Ellipsiz last Tuesday, following the sale of 14 million shares at an estimated price of 18 cents each. The trade reduced its deemed holdings by 54 per cent – to 11.8 million shares or 4.6 per cent. That was the group’s first sale since it became a substantial shareholder in 2003. The disposal was also made at sharply lower than its previous purchase prices.

Aegis previously acquired 16.2 million shares from September 2003 to March 2007 at estimated prices of 38.5 cents to 98.5 cents each. The group became a substantial shareholder in September 2003 following the purchase of 2.4 million shares at 47.3 cents each, which raised its interest to 6.1 per cent.

Investors should note that Atlantis Investment Management Ltd purchased one million shares on Jan 21 at an estimated price of 24.5 cents each, which increased its deemed holdings to 14.3 million shares or 5.6 per cent. The group previously reported an initial filing (for the second time) on Jan 15 of one million shares at 29 cents each, which raised its interest to 5.2 per cent.

The counter closed at 18 cents on Friday.

The writer is managing director at Asia Insider Ltd

Source : Business Times – 23 Jun 2008