Henderson Land Development chairman Lee Shau-kee has warned investors to remain cautious despite the latest rally in the Hong Kong stock market. Lee said it was becoming hard to predict the market after a rapid surge in the past week. The benchmark Hang Seng Index rose 4.32 per cent, or 902 points, to 21,768.51 in the past two days amid continuous inflows of liquidity. It has jumped 9.54 per cent, or 1,896 points, since the end of August. 'Be cautious, this is not a time for aggressive investment,' Lee, the second-richest man in Hong Kong, said at the opening ceremony of the Mira Hong Kong. He reiterated his investment strategy of cashing out 10 per cent of his portfolio every time the Hang Seng Index went up 1,000 points, meaning he would have offloaded half his portfolio if the index reached 25,000 points. But he would keep his favourite stocks - Industrial and Commercial Bank of China, China Life Insurance, CNOOC, China Shenhua Energy and China Overseas Land & Investment. Lee also said he would reinvest the money reaped from the disposal of grade A corporate bonds, which offer an annual yield of 6 to 8 per cent, and Australian dollars because the Australian economy and banking system were quite resilient to the financial crisis. Land was also a viable investment option, he added. Meanwhile, Lee said he had subscribed to US$110 million worth of shares of two Hong Kong initial public offerings. He invested US$10 million in China South City Holdings, which manages logistic operations and runs a trade centre in Shenzhen, and US$100 million in China Resources Cement Holdings. China South City is raising up to HK$3.15 billion by floating 1.5 billion shares, while China Resources Cement is issuing 1.64 billion shares to raise HK$6.39 billion. The two firms are scheduled to debut on September 30 and October 6, respectively. Tread carefully Henderson chief says now is not the time for aggressive investment Since the end of last month, the Hang Seng Index has jumped: 9.5%
