Sun Hung Kai Properties

SHKP director profits in share deal

PUBLISHED : Saturday, 07 April, 2012, 12:00am
UPDATED : Saturday, 07 April, 2012, 12:00am

Sun Hung Kai Properties' independent non-executive director William Fung Kwok-lun spent almost HK$10 million increasing his stake in the beleaguered developer on Monday, showing his support for the company which, in turn, helped him make a paper profit of HK$240,000.

Fung, who is deputy chairman of blue chip trading powerhouse Li & Fung, spent HK$9.35 million on 100,000 shares of SHKP at HK$93.5 apiece on Monday, according to a notice filed to the stock exchange.

Fung's purchase came a day before the joint chairmen of Sun Hung Kai Properties, Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen held a media gathering to deny any wrongdoing and attempt to allay investors' fears. The Kwok brothers were arrested by the Independent Commission Against Corruption (ICAC) on March 29, along with former Chief Secretary Rafael Hui Si-yan. No charges have been laid against anyone in the case.

The arrests triggered the biggest sell-off of the company's shares in 14 years when it resumed trading on March 30. They fell to a low of HK$94 before closing at HK$96.50, down 13.1 per cent, and wiped HK$38 billion off the company's market value .

The slight rebound in the share price after the brothers' denial brought Fung a tidy profit.

Li Kwok-suen, a fund manager at Phillip Capital Management Fund, would not rule out the possibility that some tycoons' close friends might buy the stock to show their support. But he warned retail investors to be cautious. 'It's highly risky trying to pick the bottom as the corruption probe ... may take months,' he said.

Li said the stocks had been trading at a big premium over rival developers due to Sun Hung Kai Properties' strong brand and reputation for good corporate governance. 'Now the scandal will possibly knock it down by another HK$30 before it finds a floor,' he said. SHKP traded at HK$112.5 a share before the company requested a halt in trading after the arrests, on March 29.

Another fund manager, who asked not to be named, said the shares would remain under heavy selling pressure on Tuesday when the Kwoks and Hui report back to the anti-graft body for further questioning over the allegations. 'This may mean more earthshaking news about the probe. More and more hedge funds will use any negative news to short the stock, and twill buy it back at lower prices for short term gain,' the fund manager said.