Insiders scoop up bargain buys during bourse's plunge

AS SHELL-SHOCKED investors were rushing to bail out of the plunging market, canny executives here were snapping up bargain-priced shares in their own firms.

'Insiders' from at least 28 listed firms have bought shares on the open market since the local bourse went into a freefall last week, according to Singapore Exchange filings.

Buyers include bank tycoon and UOL Group's non-executive chairman, Mr Wee Cho Yaw; Kim Eng Holdings executive director Ong Seng Gee; Mr Robert Chandran, chairman of recently listed Chemoil; and Singapore Press Holdings (SPH) non-executive director Lee Ek Tieng.

And cash-rich firms such as OCBC Bank and rice-cracker maker Want Want Holdings have been nibbling at their own shares on the open market, armed with mandates from shareholders for stock buy-backs.

CIMB-GK research head Song Seng Wun said yesterday that purchases by insiders when markets nosedive are often a reflection that a firm's valuation might be out of line with what investors may be willing to pay.

'Buying when everyone is panicky sends a strong signal to other investors that I have faith in my company, and I am now putting my money where my mouth is,' he said. This is especially true of the many small listed firms, which are at risk of a bigger whiplash during a market meltdown compared to blue chips.

The pattern of buying during this bourse bloodbath differed from company to company.

OCBC was buying throughout the index tailspin, according to online financial portal Shareinvestor.com.

The bank bought a total of 882,000 shares at between $8.20 and $8.90, as its stock price tumbled by as much as 6.7 per cent over the six-day losing streak.

But most firms made the bulk of their purchases during the panic two days ago, triggered by fears that global investors who had borrowed heavily in yen to fund asset purchases might have to dump their investments in light of the rising value of the Japanese currency.

Want Want bought 240,000 shares at US$1.41 to US$1.42 as its stock fell 2.76 per cent on Monday. It closed 3.6 per cent up at US$1.46 yesterday.

Broker Kim Eng bought back 100,000 of its own shares at $1.47 apiece on Monday. A private firm linked to Mr Ong bought 200,000 Kim Eng shares at $1.50 apiece on Monday and another 200,000 shares at $1.4806 each yesterday.

He also bought 70,000 shares at $1.50 each, under a DBS Nominees account on Monday. The shares closed 0.7 per cent higher at $1.48 yesterday, after falling 2.65 per cent on Monday.

Mr Wee was also in the thick of the action, buying more shares in property giant UOL. Last Wednesday, the day the Straits Times Index plunged by as much as 192 points at one stage, his investment vehicle, CY Wee & Co, bought 4.78 million UOL shares in 'a series of purchases'. No price was given.

The following day, it followed up with a purchase of 2.22 million shares at $5.032 apiece. The two transactions raised Mr Wee's deemed interest in UOL to 27.78 per cent.

Some insiders also accumulated shares in China ship-repair play Cosco.

These included Ms Mina Chan, wife of independent director Wang Kai Yuen. She picked up 200,000 shares at $2.39 apiece on Monday as the counter plunged 10 per cent.

Mr Lee Fook Choy, a director of Cosco's marine engineering unit, bought 300,000 Cosco shares at $2.656 last Friday. Cosco rose 4.2 per cent to $2.50 yesterday, making it one of the top gainers in percentage terms among STI stocks.

Mr Chandran bought 500,000 Chemoil shares at 51 cents each on Monday, while United Fiber System's chief executive, Mr Jaka Prasetya, snapped up one million of his firm's shares at 25 cents apiece on Friday.

Mr Lee Ek Tieng bought 50,000 SPH shares at $4.20 apiece on Monday.

engyeow@sph.com.sg