Tag Archives: CKI Holdings

Li Ka-Shing Digging Down Under

Three of 88 year old billionaires Li Ka-Shing’s companies approved a Joint Venture to buy Australia’s energy utility company, Duet, DUE ASX for $7.4 AUD ($5.5 USD).   The purchase, originally announced in November with a price rise in December, had already been approved by the Duet board but still has to get past Australian regulators. The involved companies are as follows: CKPH, 1113 HK, CKI, 1038 HK, PAH, 6 HK and Duet, DUE ASX.

Li Ka Shing Duet

Although Li Ka-Shing, his son and trust ownership had to abstain, given the percentage owned it’s not surprising the vote passed close to 100% for all three.

Li Ka Shing Ownership

Source: HK filing

The December 2016 offer of 3.00 AUD per share,  quickly bumped up the stock from its prior close of $2.35 to $2.71 and eventually to a peak of $2.92, but has since slid downward, with its year to date performance lagging that of the ASX 200.

Despite Li Ka-Shing’s assertions that the deal will pass the Foreign Investment Review Board, FIRB, his recent rejection to purchase a majority share in Ausgrid, owned by the New South Wales government, weighs on the stock price of DUE.

duet DUE stock

Stock Symbol DUE; Bloomberg

As to the Hong Kong stocks involved, only CKPH, the property holding stock, has come close to matching the Hang Seng’s rise.  For an interesting take on this, read the Bloomberg gadfly article.

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Shanghai Plunges While Hang Seng Slides

shanghai hang seng

Various explanations were presented for the Shanghai drop – lower liquidity, yuan fragility, a buying ban on an unlisted insurance company from buying equities and fears over upcoming data in early March but nothing specific could be blamed. Despite the drop, the Shanghai composite is still 3.9% above its recent low. For the Hang Seng, losses were widespread over all sectors with 49 of its 50 components declining.

On a lighter note, Li-Ka Shing’s CKI Holdings returns to the Hang Seng Index after an absence of 8 years.  CKI – Cheung Kong Infrastructure Holdings, LTD, HK 01038, replaces China Beer Resources, HK 00291, MC 30.8b HKD;  last price: 12.74 HKD, (2.75%) vs. Hang Seng’s (1.58%) decline;1 YR change: +50.9%.  China Beer had been significantly reduced after selling all but its beer assets.  CKI managed the return despite being thwarted in the full takeover of Power Assets Holding, PAH, HK 6, last price: 73.5 HKD, down (1.34%), MC 159 Billion hkd, another Li-Ka Shing holding and member of the Hang Seng index.  Despite a Hong Kong listing, the bulk of CKI’s revenue and assets come from international investments, primarily the U.K. with others in Canada, Australia, New Zealand and the Netherlands.  As such, it isn’t as heavily impacted by weakness in China and Hong Kong but has felt the pain of the decline in the British Pound, Australian Dollar and Canadian Dollar against the US dollar-linked Hong Kong Dollar.