Ordinary Gweilo

I am amused to see that the SCMP has turned on Lee Shau-kee after previously reporting his mad predictions about the Hang Seng Index as if he were some kind of genius (Lee losing Midas touch as trust falls 25pc in value – subscription required): 

Lee Shau-kee, who was last year touted as Asia’s Warren Buffett, is finding his reputation as a champion stock picker increasingly tarnished.

The tycoon yesterday revealed that the value of his personal trust invested mainly in Hong Kong stocks had dropped 25 per cent from its peak last year – a paper loss of HK$50 billion.  Dubbed “Asia’s Midas of Stocks”, Mr Lee has proved to be an investment mortal and is feeling the pain of the slumping market along with the small punters he encouraged to buy stocks during last year’s bull run.

Mr Lee said his Shau Kee Financial Enterprises, a personal trust he founded in 2004 with HK$50 billion in seed capital, saw its value surge to HK$200 billion as the Hang Seng Index rose to a record 31,638.22 points in October last year.

The index has since slipped 32.92 per cent to 21,223.5 points yesterday while Mr Lee said the trust’s value had lost 25 per cent to HK$150 billion.  Speaking at a media lunch hosted by the Hong Kong Pei Hua Education Foundation, Mr Lee said he was no longer as optimistic about equities but had not given up entirely.  “I hope the Hang Seng Index will rebound to the 25,000 level by the end of this year,” said Mr Lee, who is also the chairman of Henderson Land Development.

But his predictions are increasingly falling on deaf ears as they prove to be way off the mark.  In May, he said the index would rise to the 30,000 level by August, the month of the Beijing Olympics.  In December last year, less than a month after predicting that the index would return to the 30,000 level by year-end, he pushed back his target to the first quarter of this year, blaming turmoil in global markets.

Mr Lee yesterday said market sentiment would not improve in the coming months, partly because summer was “a low season”.  “It is not a good time to buy stocks at the moment”, even though he believes that the market at this level has reached its bottom.  Mr Lee expects the stock market will start improving by September, and he may consider buying then.

He is also bearish on the property market. With rising inflation and tighter lending policies, he does not expect home prices will see a sharp appreciation.  “Don’t make any investment move at the moment,” Mr Lee said.  But gold – long a safe haven in any investment storm – would perform better in the wake of the weakening US dollar.

All I can say is that if Lee Shau-kee thinks now is not a good time to buy stocks, it must mean that the market is going to be heading upwards.