Famed for his sharp business acumen and knack for perfectly timed investments, Hong Kong billionaire Li Ka-shing (李嘉誠) is shifting away from a slowing Chinese economy and bargain hunting in Europe.
The move is seen as a quest for stability for the tycoon’s vast empire and a sign of diminishing confidence in the region.
Li’s holdings are embodied in a striking 63-story glass skyscraper in the heart of Hong Kong and his business decisions have the potential to affect property and utility prices for the territory’s 7 million residents.
Photo: AFP
However, his focus is now switching to European and other foreign markets.
The announcement just over a week ago that he plans to buy UK phone giant O2 for up to US$15.4 billion follows prolonged asset offloading in China and Hong Kong — and a major reshuffle of his business empire announced last month.
The 86-year-old, dubbed “Superman,” dismissed talk of a withdrawal from the region as “a big joke” last year.
However, analysts say that his moves are a reaction to the China slowdown as well as political turmoil in Hong Kong.
Pro-democracy protests brought parts of the territory to a standstill for more than two months last year, with demands Beijing grant more freedoms in the territory’s chief executive election in 2017.
“They [Li’s companies] are worried about the slowing down of economic growth in China, and also the political stability in Hong Kong,” Core Pacific-Yamaichi International Ltd head of research Castor Pang (彭偉新) said. “The concern about economic growth seems to be the major reason for … such dramatic moves during recent months.”
Li has offloaded major property investments in China — where growth slowed to a 24-year low last year — after investing heavily there in the 1990s.
Shortly before the O2 move, Li’s firm Cheung Kong Holdings Ltd (長江實業) announced it would buy Britain’s Eversholt Rail Group, which owns 28 percent of the nation’s passenger trains, for US$3.8 billion.
Li is playing the market with Europe a bargain hunter’s playground, Pang said.
“He is quite good at timing for acquiring business and assets at the lowest price, this could also be why he chooses the European market at this moment,” he added.
Independent financial analyst Francis Lun (藺常念) said that the O2 move is a clear sign Li is steering away from Hong Kong and the region.
The major restructuring of his businesses last month also saw assets from multiple sectors combined under two new listed companies to be incorporated in the Cayman Islands.
“He is transferring registration to the Cayman Islands, shaving off a lot of his Hong Kong and China assets, and investing in what you call politically safe areas,” Lun said.
The revamp of his empire is also largely seen as paving the way for Li to hand over the reins after he retires. Cheung Kong and Li’s Hutchison Whampoa Ltd (和記黃埔) — two of Hong Kong’s largest companies — shares went up more than 10 percent after the reshuffle announcement and have remained stable following the O2 move.
Li, born in 1928 in Chaozhou, China, is Asia’s richest man — worth US$31.4 billion according to the Bloomberg Billionaires Index. He and his family fled to neighboring Hong Kong during the Sino-Japanese War.
Li first started his own business in 1950 manufacturing plastic flowers. After diversifying into property he saw large profits in the 1960s and in the next decades his businesses reached into many sectors of Hong Kong, including utilities, retail and telecommunications.
Li has had a longstanding interest in overseas markets, making investments in the Canadian property and energy sectors in the 1980s.
In recent years he has sold off local and regional assets while other Hong Kong tycoons, such as the Kwok (郭) family, who own Sun Hung Kai Properties Ltd (新鴻基地產), remain heavily invested.
“He is a maverick — maybe he is a precursor for things to come,” Lun said.
In China the restructuring was downplayed.
“He is worthy of the nickname ‘Superman,’ but he may not be suitable as a bellwether for the future,” said the Global Times, a nationalist tabloid owned by the ruling Chinese Communist Party’s official newspaper, the People’s Daily.
For Li, the moves indicate a quest for stability and security for the next generation.
After the revamp, when asked if he was preparing to pass the baton to his son Victor (李澤鉅), Li said: “The tracks have been laid down, everyone has a goal, it’s a good thing for the company’s foundation.”
However, Li shows little sign of slowing down and has given no timescale for his retirement.
“I don’t think he will ever retire completely because this is not the way that Chinese do things,” Lun said. “Until he cannot even walk he will go to work every day.”
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