Fri, Aug 24, 2007 - Page 11 News List

Hong Kong tycoon warns investors

AFP , HONG KONG

Hong Kong tycoon Li Ka-shing (李嘉誠) yesterday warned investors of the high risks involved in the volatile markets sparked by the US subprime mortgage loan problems which sent stocks plummeting last week.

He cautioned investors to stay alert while dealing in shares although any negative economic development in the US would not only affect Hong Kong but the whole world.

"Investors should be careful ... when the market reaches this high, there are higher risks involved whether it is in Hong Kong or in China. When the stocks have risen so high, this can create problems too," he told reporters.

If the loan problems in the US escalate, he expects the US government will cut interest rates further -- two to three times. When this happens, Hong Kong banks will follow suit, he said.

Li was speaking at a press conference announcing the interim results for ports-to-telecom conglomerate Hutchison Whampoa Ltd (和記黃埔) and property giant Cheung Kong (Holdings) Ltd (長江實業).

Hutchison Whampoa posted a 53 percent increase in first-half profits to HK$28.8 billion (US$3.7 billion), over last year yesterday, boosted by asset sales and improved results from its 3G mobile phone unit.

Meanwhile Cheung Kong, which holds 49.9 percent of Hutchison Whampoa, posted a 52 percent profit increase to HK$18.54 billion from HK$12.2 billion.

Hong Kong saw panic-selling last week, plunging the market by as much as 6 percent amid uncertainty over global markets in the aftermath of US mortgage sector problems.

But it has rebounded after the US Federal Reserve cut its discount rate by half a percentage point which helped to soothe credit worries.

Li said he expected the strong economic growth in the mainland and Hong Kong to lend momentum to its business.

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