Category: Money Tips Date: 2006-12-03
Investors Q: Recently, the China Securities Regulatory Commission issued the first buy-back for approval. Handan Iron & Steel allowed to start the public shares buy-back program, the company did not repurchase more than 9,000 the number of shares, price is not more than 3.77 yuan, the operation period of 6 months. Since the "public listed companies to repurchase shares of management methods (for trial implementation)" has been introduced, Handan Iron & Steel became the first public stock repurchase program approved companies. In fact, in addition to listed companies outside the buy-back to G Baosteel, G wide control, G 31 as the representative of the major shareholders holding tradable shares and events, and in the public utilities, red beans shares represented by executives purchased BOE The company's shares of the frequent occurrence of the outstanding shares. So, how to look at insider holdings?
Xu Hui: We believe that three types of insider holdings of the meaning of the outstanding shares of the companies is different. First of all, for the current part of the outstanding shares of listed companies on their holdings of view, its purity is not strong. Because the current view, Handan Steel and Valin two companies have convertible bonds outstanding, so, some analysts pointing the purpose of the company may repurchase outstanding shares is to ensure that issuance of convertible bonds share transfer as soon as possible to alleviate the company's future financial expenditure. That overweight is a convertible; Secondly, the current shareholders by Chibengongsi stock situation, their are also other purposes. The most immediate, the current holdings of major shareholders of a number of plans are as part of the price, that is, the reasons for their holdings from stocks to change the agreement's commitment is to the shareholders as compensation for part of the circulation carried out. That overweight is a reform of the price of the stock; third, compared to the above two groups of overweight equities, executives buy stock on a number of even more pure, more pro-active approach. In this sense, may also indicate these shares is more cause for concern. The end of 2002, ZTE executives a large number of purchase of the company's stock, and for now, the stock price was now 3 times (diluted).
Of course, rational terms, ZTE case of just an individual case. Based on long-term investment, "the phenomenon of insider holdings," can not serve as the rationale for conducting transactions, only as a transaction information. Finally the real factors that led us to buy, it should be from the company's own value and future prospects.
