Li Ka-shing, Asia’s richest man, spent HK$289.7 million (S$56.3 million) raising his stake in Cheung Kong (Holdings) Ltd, fuelling the 8.6 per cent

Li Ka-shing, Asia’s richest man, spent HK$289.7 million (S$56.3 million) raising his stake in Cheung Kong (Holdings) Ltd, fuelling the 8.6 per cent gain in the property developer’s stock over the past week.

Mr Li, Cheung Kong’s chairman and founder, bought 2.83 million shares on July3 and July4 at an average price of HK$102.24 per share, according to filings to Hong Kong’s stock exchange. Mr Li raised his stake to 39.88 per cent from 39.76 per cent.

Investors here and across Asia look to Mr Li, referred to locally as ‘Superman’, for a sense of where the Chinese city’s economy is headed because his companies invest in businesses ranging from supermarkets to shopping malls and ports.

Shares of Cheung Kong have gained 16 per cent this year, beating the 14.3 per cent gain in the benchmark Hang Seng Index.

‘There should be more upside to Cheung Kong, as well as other local property developers, which have been undervalued,’ said Manfred Ho, an analyst at BNP Paribas SA.

‘Demand for housing should remain robust because of the strength of Hong Kong’s economy, giving good support to housing prices.’ Mr Ho has a ‘buy’ rating and target price of HK$125 for Cheung Kong shares.

The stock rose 0.9 per cent to HK$111.20 at the close of trading here yesterday, compared with a 1.3 per cent gain in the benchmark.

Mr Li, with a fortune of US$23 billion, according to Forbes magazine, has added to his Cheung Kong stake at least 21 times since March22, when the property company announced a 29 per cent jump in annual profit. Cheung Kong is Hong Kong’s biggest developer by market value.

Cheung Kong’s income from property sales ‘would remain high’, Credit Suisse analysts including Clifford Lam wrote in a report last week, ‘even without any significant increase in prices’. The Swiss bank raised its target price for the stock to HK$122 from HK$116.

Profit for Mr Li’s flagship rose to HK$18.08 billion in 2006, compared with HK$14 billion a year earlier, the company said on March22, on higher property sales and rising contributions from unit Hutchison Whampoa Ltd. Mr Li’s stake in Cheung Kong stood at 39 per cent on March22.

Cheung Kong shares surged 7.1 per cent on July6, the most in more than six years, after Credit Suisse raised its target price.

Source: The Business Times, 10 July 2007