Thursday, September 20, 2007


Asia's Own Warren Buffett

He's ranked in the top 30 in terms of the world's richest man. Lee Shau Kee made his fortune in real estate. Yesterday the Hang Seng Index charged past the 25,000-point barrier to close at an all-time record of 25,554.64. Lee had much earlier predicted the 25,000 level after his 22,000 level was breached. If you missed out on making a killing last month, listen again - Lee has now raised his earlier 25,000 year-end target for the index by 3,000 points to 28,000.

Lee still does not think the market was overbought when the HSI soared nearly 1,000 points and that the rise was due to a boost from the higher-than-expected interest rate cut by the US Federal Reserve. "If you guys had followed my tactics half a year ago ... you would have earned enough to quit your reporter's job," Lee told the media. Lee, 79, chairman of Henderson Land Development (0012), said in March the HSI would reach 22,000 points by year-end. On August 24, he revised his prediction to 25,000. He also forecast the Hang Seng China Enterprises Index would reach 15,000 this year, and the H-share index surpassed that mark yesterday, closing at 15,255.49. Now he has revised his target upward to 20,000.

"The HSI will go up and down for a couple of months, then it may gain momentum again and rise steadily. Perhaps, the HSI will reach 28,000 points by the end of 2007, and will test the 30,000 level around the Chinese New Year next year ... if there are no special political events or whatever."

After reviewing his three "basic laws" of stock investment - choose the country, the industry, then the stock - he was keen to share his insight on the impact of the rate cut on carry trades.

"The rate cut will push down the US dollar and, in turn, the Hong Kong dollar ... you should look at a currency of higher value," said Lee, whose net worth has been put by Forbes magazine at US$17 billion (HK$132.6 billion). Last year his net worth was supposed to be just US$13 billion. He has made tons from the strong markets. Of his portfolio, he tends to have at least half his net worth in stocks, bonds and notes - give or take US$10 billion exposure.

"I have bought Australian dollars, which have 7 to 8 percent yield. To get capital, you borrow Hong Kong dollars, which costs 4 to 5 percent. Then you make a profit [from the interest difference]. In addition, you'll gain from appreciation of the Aussie dollar." He recommends short-selling Japanese bank stocks or property stocks in the United States - the "worst country" to invest in. Investment banks will be happy to help you short-sell, provided "you have a few hundred thousand dollars worth of stocks on hand."

Best tidbit, Lee Shau Kee's second son's name is Martin Lee Ka Shing. Yes, the same name as the "superman" of Cheung Kong & Hutchinson Whampoa fame. Lee Shau Kee is now the second richest man in all of China, Taiwan and HK. The second son married a TVB small time starlet Cathy Tsui. Juicy gossip - Tom Cruise & Katie Holmes wedding cost US$5m; Donald Trump & Melanie Knauss wedding cost US$4m. Lee junior & Cathy's wedding cost US$13m! In addition, Lee Shau Kee gave two luxury apartments to Cathy's parents valued at HK$100m (US$12.8m) ... Its good to be the king!

To be fair, he did say that Chinese shares trading on mainland markets are at an “unreasonable” premium to those in Hong Kong, threatening to create a bubble, back in May 2007. True to form, his bullish calls have been in HK stocks and H-shares in HKSE. Btw, he is a great philantrophist also, especially in higher education. Of course some will quibble over how much more charity he can/should do, he is still better than a lot of wealthy people.

1 comment:

Teddy said...

But I believed that the bubble will burst soon !