Li Ka-shing and son reveal 11.6pc interest in Postal Savings Bank H-shares

Hong Kong’s richest man plans to hold the stock for the long-term as he expresses confidence in the lender

PUBLISHED : Thursday, 29 September, 2016, 8:33pm
UPDATED : Thursday, 29 September, 2016, 11:01pm

Hong Kong’s richest man Li Ka-shing, together with his son and his three charitable foundations, have accumulated a combined deemed interest of 11.62 per cent of the H-shares, or 2.8 per cent of total issued shares, of Postal Savings Bank of China, which saw a poor debut on the stock market this week.

Li, chairman of developer of Cheung Kong Property Holdings and conglomerate CK Hutchison Holdings, his son Victor Li Tzar-kuoi who is deputy chairman of both companies and the three charitable foundations, revealed the stake in a filing to the stock exchange on Thursday, according to a statement issued by the Li Ka Shing Foundation.

The Hong Kong Securities and Futures Ordinance requires anyone with a greater than 5 per cent stake in a publicly listed firm to file a statement of their interests.

The deemed interest arises from the Li’s investment in performance linked notes related to the bank which were issued by a financial institution, which was not identified. Details of the notes and the conditions under which they would be converted into shares of the bank were not disclosed.

The US$7.3 billion offering by Postal Savings Bank, the largest initial public offering worldwide in the past two years, saw the second worst debut among companies that raised over US$7 billion.

It closed at HK$4.77 on Thursday, unchanged from its debut close on Wednesday, which only edged up 0.2 per cent to HK$4.77.

“Mr Li Ka-shing is having an absolute confidence in the Postal Savings Bank and he believes the investment is suitable for himself and the charity foundations,” a spokeswoman for Cheung Kong Property told the South China Morning Post. “[He] is taking this as an long-term investment.”

Ben Kwong Man-bun, a director of KGI Asia, said Postal Savings Bank may not have had a strong debut but its shares may perform well due to its wide branch network and market position.

The Beijing-based bank operates more branches than any other lender in the country, with 8,301 of its own outlets and 31,756 agency outlets run by the postal service, dotted across China from Lhasa in Tibet to Beijing and extending deep into rural areas.

“The bank’s IPO price was a bit aggressive and that explains the lukewarm response from both Hong Kong and global investors. In fact, the bank’s wide branch network and business foundation is good. It is a good long-term investment but just not a short term bet as its sheer size means it is hard to see any sharp rise in share price in the near term,” Kwong said.

Postal Bank sold 77 per cent of its stock on offer to six cornerstone investors, including a number of state owned firms, which together bought US$5.7 billion in shares to offset a lukewarm response by global and local investors. In return for early and guaranteed allocation of shares, cornerstone investors are committed to a six-month moratorium on selling the stock, according to term sheets.