When a great investor speaks, it’s best to keep an eye on the direction of his feet as well as his mouth.
Li Ka-shing has pooh-poohed the notion that his commitment to Hong Kong is waning, saying in 2012 that he has a “special feeling” for the city and “definitely” won’t withdraw investments. Special feelings are for Japanese snowstorms and favorite sports teams. Business is business.
Friday's news that Hutchison Whampoa is close to buying 02 of the UK for as much as $15 billion seals an impression that has been building for years. Li has seen the future: and it's in Europe.
The trend is undeniable. In the past two years, Li tried to offload Hutchison’s Hong Kong supermarket chain (before instead selling a stake in its retail unit for $5.7 billion), raised $3.1 billion listing Hong Kong electricity assets and sold part of its port holdings in the city.
Over the same period, Hutchison bought Telefonica's Irish unit for $1.1 billion, purchased more mobile spectrum in Austria and held talks to acquire wireless assets in Italy. One of Li's companies is also among bidders for Swedish electricity grid Fortum.
"Superman," as Asia's richest person is known to local media, made his name buying assets that were unloved and waiting patiently for them to rise. Hong Kong property, the bedrock of Li's fortune, is anything but unloved. Prices more than doubled since 2009 and are the most expensive in the world. Cheung Kong hasn't bought land since 2012, Bloomberg News reported in September. The 86-year-old, who has a net worth of more than $30 billion according to the Bloomberg Billionaires Index, has also been selling in China, where economic growth is slowing and property prices have started to drop.
If Europe has been looking like a dog with fleas lately, consider where Hong Kong was in 1967 when Li made his first move into real estate: convulsed by riots inspired by the Cultural Revolution across the border in China. Every dog will have its day, as Li knows. Just ask Mario.
