When Li Ka-shing stops banking on a stock ...
Few investors like to bet against tycoon Li Ka-shing.
That might partly explain why the Hang Seng Index ended up back where it closed out the year after Mr Li (right) dumped 40 per cent of his personal stake in Bank of China.
His timing looks to have been perfect, jumping the gun ahead of other strategic shareholders such as Royal Bank of Scotland, although the pricing may not have been.
Mr Li sold his 2 billion shares at HK$1.98 apiece, making a net gain of HK$1.7 billion based on the pre-initial public offer price of HK$1.13. But it was 33 per cent below the IPO price of HK$2.95 that his Cheung Kong (Holdings) and Hutchison Whampoa paid when they subscribed to a total of 473 million shares 2 1/2 years ago.
Why Mr Li was in such a hurry to sell his Bank of China shares at below book value is anybody's guess, but he has been warning investors to limit their exposure to equities even before the Lehman Brothers fiasco.
