Esprit dives as boss cashes in

ESPRIT Chairman Michael Ying is reaping substantial rewards for the steady expansion of his fashion retail chain with growth that has fattened the company's bottom line, won plaudits from analysts, and made him very rich.

The company said today that controlling shareholder Ying yesterday placed some of his shares, garnering millions in the process. News of a slightly discounted deal weakened Esprit shares by 70 cents or 2.2% today to HK$32.70.

The market has seen this cycle played out before in recent months. This time Ying sold 2.93% of the company, or 35m shares, at HK$31.30 apiece. The placing netted him a cool HK$1.1bn ( £ 76.2m) and trimmed his holding to 30.83% from 33.76%.

It followed a similar sale last May, when Ying sold 42.5m shares at HK$14.70; a third deal last October when he placed 50m shares at HK$25.20; and a fourth sale two months ago of 20m shares at HK$28.80.

In all, the four transactions have sliced his stake by almost 13% but still left him with a large chunk of the equity.

Analysts and the markets have applauded Esprit over the past year, during which time its shares have risen by 123%, far outpacing the 45% rise in the benchmark Hang Seng index. The drivers of the stock's ascent have been the euro's surge against the dollar and Esprit's plans for new markets, including the United States and Britain.

Esprit already has a major presence in Germany, but it reports its figures in Hong Kong dollars, which are in effect proxy US dollars because of the Asian city's currency board system.

The single currency's appreciation has translated into significant Hong Kong dollar gains when accounts are totted up. In addition the Esprit formula - the chain sells lines of trendy mid-market clothing - appears to have a wideranging appeal. There are currently about 560 stores worldwide, with plans to boost that total by several hundred.

Brokers said the gains for banks and property plays came despite unease both about what key US jobs data may reveal today, and ahead of a holiday for Hong Kong markets on Monday.

Cheung Kong, the major property developer controlled by billionaire Li Ka-shing, added 75 cents or 1.1% to HK$66.50. Hutchison Whampoa, the conglomerate that is Li's other principal vehicle, rose 25 cents or 0.4% to HK$56.50. HSBC, the top bank, firmed 50 cents or 0.4% to HK$117.50, while Bank of China (Hong Kong) gained a more modest 5 cents or 0.3% to HK$14.85.

The Hang Seng index was better by 19.33 points or 0.2% at 12,695.58. Japanese stocks were also pushed higher, encouraged by Wall Street and continued signs that the local economy remains on a positive trajectory.

The rise was led by Advantest, the maker of chip-testing devices. It strengthened 190 yen or 2.2% to 8,850 on Press reports it could double operating profit this financial year to 60bn yen.

NTT DoCoMo, the mobile phones company, also headed higher on the positive mood, rising 3,000 yen or 1.3% to 230,000. The Nikkei 225 closed 132.53 points up at 11,815.95.

Tech issues led Singapore upwards with inspiration coming from the US. Chipmaker Chartered Semiconductor gained three cents or 1.9% to S$1.62, and the Straits Times index jumped 6.36 points or 0.3% to 1877.06.