Shares of Chinese electric car maker BYD plunge after Warren Buffett cut its stake

Hong Kong shares listed on BYD tumbled on Wednesday after Warren Buffett’s Berkshire Hathaway reduced its stake at the Chinese electric car maker — and one fund manager said that could be a warning sign of more to come.

The group slightly reduced its shares from 20.04% to 19.92%, according to A Registering with the Hong Kong Stock Exchange. Berkshire sold 1.33 million shares of BYD for about $47 million – the group now owns 218.7 million shares, the filing showed.

“This is a common trend for investors who are starting to make money from the market,” Yang Liu, Atlantis Investment’s president and chief investment officer, told CNBC’s “Squawk Box Asia” on Wednesday.

“Maybe we’ll see more.”

BYD shares fell more than 12% during Wednesday’s session in Hong Kong, the worst performer ever Hang Seng Index, according to Refinitiv data. The stock has jumped more than 600% in the past 10 years.

Earlier this week, the company reported strong figures for the first half of 2020 with net income of 3.6 billion yuan ($521 million), three times more than the previous year.

When asked what this means for the Chinese electric car market, Liu said Berkshire’s latest move could be “warning signals that the market may be… [coming] for a major correction.

“There are many doubts I think [Buffett] “I got a bit nervous,” she said. “Maybe this stagnation ahead of us for the US economy and also the overall weakening of Chinese consumption will reduce investor confidence to a broader scale.”

Looking forward to The upcoming National People’s Congress of China in OctoberLiu said China had room for more government stimulus measures, and said the current package was “not enough.”

last week, China’s State Council announced a series of stimulus measures Worth tens of billions of dollars, as the country seeks to boost its economy hit by the Covid lockdowns and the real estate crisis.

“There is room for the government to help the economy and boost confidence,” the fund manager said.

She said people would be looking for evidence of the government’s growth forecast “to see what’s going on”.

“It will give us a great indication [on] Where is the Chinese economy headed,” including the direction of the government’s non-proliferation policy, and what measures will be taken to tackle low consumption, she said.

“The economy needs confidence to be believed, now it’s all about confidence,” Liu added.

– CNBC’s Yun Liu contributed to this report.