The powerful investor influence of Hong Kong tycoon Li Ka-Shing was truly on show today. Shares of China Shipping Container Lines (CSCL) and China Cosco Holdings went into freefall after two companies controlled by Asia's richest man reduced their stakes in both Hong Kong-listed carriers.
By the time the market closed, CSCL had plummeted almost 13 percent with China Cosco dropping 8 percent. The share turnover for the day on both stocks topped US$750 million.
The stunning fall in Hong Kong was in stark contrast to CSCL shares that soared more than 74 percent in its Shanghai Stock Exchange debut today. China's number two carrier raised US$2.1Bn in its initial public offering last week.
But Shanghai investors may not yet have heard of Li's CSCL and China Cosco sale. The tycoon's ports-to-telecommunications company Hutchison Whampoa sold 89 million shares of Hong Kong-listed China Cosco in a placement arranged by JP Morgan.
Cheung Kong (Holdings) Ltd, Li's property company, sold 250 million shares in CSCL. That placement was arranged by UBS. It is estimated that the share sale raised US$485 million.
The tycoon is revered among Hong Kong investors. Book runners rely heavily on multi-million dollar institutional stakes taken by Li and his tycoon buddies to push up the popularity of IPO.
But it also works the other way around and after reports that Li's companies had sold off chunks of their shipping shares, investors stampeded for the exits.
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