BYD falls after Buffett reduces his position; one fund manager believes it could be a danger sign


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BYD’s Hong Kong-listed shares fell on Wednesday after Warren Buffett’s Berkshire Hathaway reduced its interest in the Chinese electric carmaker — and one fund manager said that this could be a sign of more to come.

According to a Hong Kong exchange report, the conglomerate cut its stake from 20.04% to 19.92%. Berkshire sold 1.33 million shares of BYD for around $47 million, bringing the conglomerate’s total holdings to 218.7 million shares, according to the filing.

This is a common pattern for investors starting to withdraw funds from the market,” Yang Liu, chairperson and chief investment officer at Atlantis Investment, said on CNBC’s “Squawk Box Asia” on Wednesday.

BYD, an electric vehicle manufacturer, fell more than 12% on Wednesday, bringing down the Hang Seng Index.

According to a document, Warren Buffett’s Berkshire Hathaway reduced its investment from 19.92% to 20.04%.

According to Yang Liu of Atlantis Investment, this is a “regular tendency,” and “maybe we’ll see more” of such cuts in the future.

According to Refinitiv statistics, BYD shares fell more than 12% in Hong Kong on Wednesday, making it the worst performer on the Hang Seng Index. In the last decade, the stock has increased by more than 600%.

Earlier this week, the company posted outstanding results for the first half of 2020, with net income totaling 3.6 billion yuan ($521 million), more than tripling from the previous year.

When asked what this means for China’s electric vehicle sector, Liu suggested that Berkshire’s latest move could be “warning indicators that the market may be [heading] to a big downturn.”

There are too many uncertainties, she remarked, and I think [Buffett] became a little apprehensive. Perhaps the impending recession in the United States, combined with weakening Chinese demand, will reduce investor confidence on a broader scale.


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