Hong Kong developers buy US$193.5 million worth of own shares in bid to support market, boost confidence
- New World Development, Wheelock and Co, and a joint venture owned by Li Ka-shing and Victor Li Tzar-kuoi buy nearly HK$1.5 billion worth of shares last month
- NWD and the father-son duo are sitting on millions in paper profit as the value of their investments have since risen
The slumping equity market has prompted some Hong Kong developers and their majority owners to step in and shore up support for investors, while increasing their stakes at the same time.
At least three companies – New World Development, Wheelock and Co, and a joint venture owned by the father-son duo of Li Ka-shing and Victor Li Tzar-kuoi – have been actively involved in buying shares on the slide.
They swooped in on nearly HK$1.5 billion (US$193.5 million) worth of stock last month after prices fell between 20 and 30 per cent as panic over the coronavirus epidemic swept through global markets, according to Hong Kong stock exchange filings.
“The discount to asset value of most listed property companies dropped to their lowest in two decades [last month],” said Jeff Yau, a property analyst at DBS Bank (Hong Kong). “Companies and majority shareholders believe investing in their own business would generate better return than venturing into a new project or investment now.”
Of the three, only NWD was involved in buy-backs. In March, it spent nearly HK$450.5 million to acquire 54.2 million shares in the range of HK$7.46 to HK$9.5 each. NWD shares have lost 20 per cent this year.
