Hang Lung Group shows faith in property with buy-backs

Hang Lung Group, chaired by Ronnie Chan Chichung, yesterday announced it acquired 100.98 million shares in its subsidiary Hang Lung Properties for HK$2.55 billion.

The share purchases took place from June 5 last year to Wednesday at an average stock price of HK$25.20.

The announcement said the board of directors was confident on the long-term potential of the property investment and development industry in Hong Kong and on the mainland and that it was the right time to buy shares in Hang Lung Properties, which has assets in both markets.

Hang Lung Group held 52.87 per cent of the shares of Hang Lung Properties as of Wednesday. Investment bank Jefferies said in a research report last month that Hang Lung Properties was well positioned to withstand industry headwinds given its management competency even as both the Hong Kong and mainland property sectors face policy tightening and interest rate risks.

Controlling shareholders continue to buy back shares in property developers as they are considered to be trading at deep discounts to their asset values.

Henderson Land Development chairman Lee Shau-kee spent about HK$3 billion last year to buy the company's stock. The buying spree continues this year. On January 10, he acquired 350,000 shares at HK$44.86 each and a further 480,000 shares on January 15, raising his holding in Henderson Land to 65.73 per cent from 65.69 per cent.