Thursday, 13 March 2014

Fears Overblown

Hutchison Port Holdings Trust still owns several terminals in Hong Kong
The media is whipping itself into a frenzy with news that tycoon Li Ka-shing has sold of another big asset in Hong Kong.

Today Hutchison Port Holdings Trust (HPHT) agreed to sell a 60 percent stake in Hong Kong Terminal 8 west for HK$2.47 billion to two mainland shipping conglomerates, Cosco Pacific and China Shipping Group.

The agreement comes a year after HPHT bought operator of Terminal 8 west from DP World last March. HPHT stands to gain HK$125 million from selling the 60 percent stake.

HPHT also has Terminal 4, 6, 7, 9 and runs Terminal 8 east with Cosco Pacific.

"Li has long lost confidence in the Hong Kong port business when he decided to spin-off operations through HPHT onto the Singapore Exchange in 2011," said one analyst who asked to remain anonymous.

However, other analysts say the latest deal is consistent with Li's strategy he used for the spin-off of Hong Kong Electric and his attempt to do the same with ParknShop last year.

Hey folks -- why the big freak out about Li selling off assets, thinking it's a sign he wants to leave Hong Kong?

The tycoon is first and foremost a businessman. As HPHT is a publicly traded company, he has an obligation to his shareholders (of which he is probably one of them) to get the best returns for them. And this latest deal seems like a good one.

Li is thinking in terms of numbers not passion for the city in this case.

We should really freak out the day he sells his Shouson home and moves overseas.

That's when he really has no confidence in Hong Kong.

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