Billionaire Li Ka-shing says time to buy shares, property

Billionaire Li Ka-shing who predicted China’s stock market bubble would burst in 2007, said China will lead a global economic recovery and investors should consider buying shares and real estate.

“China’s economy will be the fastest in the world to recover, but the US economy’s recovery won’t be too late also,” Li, the second-richest man in Asia, said at a press conference in Hong Kong yesterday. “If you have the cash, you can consider buying equities and property.” Li spoke after his Cheung Kong (Holdings) and Hutchison Whampoa posted 2008 earnings, reported Bloomberg.

As Warren Buffett is called the “Sage of Omaha,” Li is dubbed “Superman” by Hong Kong’s media because many investors in Asia look to him for guidance.

Born in Chaozhou in the southern Chinese province of Guangdong, he added new technology to turn the plastics company he opened in 1950 into investments in retailing, real estate, ports and energy in 54 countries.

“I am prepared to follow Li’s call,” said Priscilla Chan, a 37-year-old housewife in Hong Kong. “Superman Li has a track record in predicting the directions of stock markets.”

Starting in the late 1950s, Li has bought assets including real-estate during crises such as the 1967 riots in Hong Kong and the 1989 Tiananmen Square crackdown in Beijing.

He paid the predecessor of HSBC Holdings Plc less than half of book value for control of Hutchison in 1979.

Stock markets rallied in the US and Asia today. US stock futures rose, indicating the Standard & Poor’s 500 Index may extend its biggest advance since 1991, as investors speculated the Obama administration’s plan to rid banks of toxic assets will spur growth. Hong Kong’s benchmark Hang Seng Index has advanced 14.5% this month, the most since October 2007. Templeton Asset Management’s Mark Mobius said earlier this week that a “bull-market” rally in developing-nation equities has begun.

Still, Li wouldn’t be drawn to say that equity markets have bottomed out, and he said the global economy is in its worst shape since the Great Depression of 1929-39. Li is No. 16 on Forbes magazine’s list of the world’s richest people with a fortune of US$16.2 billion ($24.43 billion), the publication said earlier this month. This makes him Asia’s second-richest man, behind India’s Mukesh Ambani, whose worth is US$19.3 billion.

Hutchison said 2008 profit fell 42% to HK$17.7 billion ($3.44 billion), exceeding the HK$14.3 billion median of seven analyst estimates compiled by Bloomberg. Cheung Kong’s net income fell 44% to HK$15.5 billion; the median estimate of six analysts was HK$16 billion.

To combat the slowest economic growth in seven years, China has introduced a US$585-billion stimulus package. The spending has put the slowdown under control, People’s Bank of China Governor Zhou Xiaochuan said yesterday, in an article published on the central bank’s website.

Shimao Property Holdings, which sold the nation’s most expensive home, said March 20 that falling interest rates and the stimulus package have resuscitated buyers’ confidence.

In Hong Kong, the property market will also rebound, said Victor Li, Cheung Kong’s deputy chairman and Li’s elder son. “The supply is small while demand is rising, so if you buy, after a few years, history has shown that you won’t make a loss,” Li said.

Luxury-home prices in Hong Kong, the second-most expensive in Asia, rose an average 2.1% in the first quarter so far, signalling a recovery a report by Centaline Property Agency said on Wednesday. Still, prices are 35% lower than their peak in mid-2008, according to property agency Savills LLC.

“My family has spent the last couple weeks apartment-hunting as we think the market may have almost reached its bottom after falling as much as 30%,” said Jacky Wong, a 38-year-old freelance marketer. “I’m excited by Li’s comments. I will be hunting more aggressively.”

Still, some investors aren’t as optimistic, pointing out that Cheung Kong, Li’s flagship builder, has apartments to sell. “I would be a bit skeptical about Li’s comments as he is a property developer,” said Chan, the housewife. “Of course he wants a bullish home market.”

Albert Chan, a 53-year-old owner of a property design company, also said Li’s comments won’t induce him to add to his equity or property investments. “Unlike during SARS, the current recession is a global one,” Chan said.

Hong Kong’s economy last slipped into a recession in 2003, when the Severe Acute Respiratory Syndrome epidemic kept consumers at home and some companies repatriated foreign workers