S&P removes SHKP from watch list, shares edge up
Shares of Sun Hung Kai Properties edged up yesterday after Standard & Poor's affirmed its long-term rating and removed it from its credit watch negative list, saying the arrest and probe of four of its directors had no major impact on the company's daily operations.
'We are affirming the A+ long-term corporate credit rating on the company. The outlook is negative,' the credit rating agency said.
SHKP welcomed the move, saying it 'shows the rating agency recognises its well-balanced business model'.
The negative rating outlook reflected uncertainty about the investigation by the Independent Commission Against Corruption and its potential impact on the company's strategic direction, decision-making process and competitive position.
SHKP shares rose 1.34 per cent to HK$90.2 yesterday, the first time it had crossed the HK$90 level since May 7. The Hang Seng Index rose 2.26 per cent to 19,233.94 points.
S&P said the execution of the company's well-defined strategy also remained intact despite the graft investigations. The company, it said, had taken action to improve its management structure and decision-making process in case the owner-directors and other executive directors left the board.
S&P put the company on the watch list on March 30, a day after the ICAC arrested SHKP joint chairmen Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen, and former chief secretary Rafael Hui Si-yan as part of an investigation into allegations of bribery and misconduct in public office. SHKP executive director Thomas Chan Kui-yuen was arrested by the ICAC on March 19 in connection with the probe. Early last month, the third Kwok brother, Walter Kwok Ping-sheung, was detained and released on bail by ICAC investigators in connection with the unprecedented inquiry into his brothers. All five were released on bail and no charges have been laid.
The rise in SHKP shares yesterday as S&P announced it had removed the property company from its credit watch list