What Property Bubble? Hong Kong Tycoons Buy Shares

Despite concerns over a property bubble in Hong Kong and government efforts to cool the red-hot sector, two Hong Kong tycoons: Cheung Kong Holding’s Li Ka-Shing and Henderson Land’s Lee Shau kee have been snapping up shares in their own firms.

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Guanyu said…
What Property Bubble? Hong Kong Tycoons Buy Shares

CNBC.com
25 May 2011

Despite concerns over a property bubble in Hong Kong and government efforts to cool the red-hot sector, two Hong Kong tycoons: Cheung Kong Holding’s Li Ka-Shing and Henderson Land’s Lee Shau kee have been snapping up shares in their own firms.

Robert Halili, Managing Director at Asia Insider told CNBC on Wednesday, this insider buying is encouraging news for shareholders and investors looking to bet on the real estate sector.

“The one thing I want to point out to investors is that whenever these 2 titans buy at the same time, it is almost like a solar eclipse. It only happens once in a blue moon.”

Out of the $2.6 billion dollars invested in property-related stocks over the last 10 weeks, according to Halili, Lee Shau-kee’s purchase of 39 million shares in Henderson Land accounted for $2 billion or 76 percent of the total amount.

“Prior to this year, the chairman [of Henderson Land] acquired an average of 8.5 million shares worth $309 million per year from 1993 to 2010,” he added.

Halili believes Henderson Land is a good bet for investors looking to put their money in property stocks. The share price of the company has historically risen by an average of 15 percent in the 3 months after the chairman bought shares in the company.

Last week, Li Ka-Shing bought around $13 million worth of shares in Cheung Kong, the holding company that owns interests in the property, telecom and power sectors.

Albeit a trivial amount, Halili believes the purchase could have a positive impact on the company’s share price.

“Li Ka-Shing’s recent purchase may be the start of another heavy buying spree as the chairman may look to reinvest the $2.9 billion he received in dividends from Cheung Kong in the past fiscal year,” he explained.
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