Analysts are tipping a strong shift of investment from Swire Pacific to Swire Properties, which is scheduled to debut next month as Swire Pacific spins off its property arm.
Swire Pacific shares dropped 1.49 per cent to close at HK$92.5 yesterday after hitting an intra-day high of HK$95 following the announcement of the details of the spin-off.
Swire said, by way of introduction, the spin-off would be achieved by distributing shares to existing shareholders.
'Given that property constitutes the most attractive assets of Swire Pacific, investors may shift to Swire Properties once it starts trading next month,' Phillip Capital Management fund manager Li Kwok-suen said. He said Swire Pacific shares could stay volatile in coming days.
In an announcement filed to the stock exchange, the company said shareholders would be entitled to seven Swire Properties shares for every 10 Swire Pacific A shares and seven Swire Properties shares for every 50 Swire Pacific B shares they held. It said it would distribute 18 per cent of Swire Properties shares to the shareholders. Both A and B shares are publicly quoted, widely held and traded by both institutional and retail investors. But A shares are included in the major stock market index tracked by many institutional investors and therefore tend to be more actively traded.
Swire Properties shares are expected to commence trading on January 18.