THE Hong Kong and Shenzhen-listed shares of BYD Co. fell yesterday after a large stake appearing in Hong Kong’s stock market clearing system led to market speculation that major backer Warren Buffett is planning to sell shares in the Shenzhen-based electric-car maker.

BYD’s A shares closed down 4.72% after diving 7.49% to hit an intraday low of 300.08 yuan (US$44.56), while its H shares slumped 11.99%.

The selloff came after data from the Hong Kong stock exchange Monday showed that BYD’s shares circulating in its clearing system rose 20.49 percentage points to 99.93% of the company’s total shares. A number of Chinese news media pointed out that Buffett’s Berkshire Hathaway Inc. recently had a 20.49% stake in BYD, with 225 million shares, leading to speculation among investors that Berkshire is adjusting its stake.

“For BYD, we are seeing more than 20% of stake moved to the CCASS system. Only Berkshire would have that many shares as a single investor, so the market is worried Buffett is planning to sell,” said Steven Leung, executive director at UOB Kay Hian in Hong Kong, referring to Hong Kong’s Central Clearing and Settlement System.

“Whenever there is an increase in the CCASS system, it will trigger concerns over the near-term selling pressure of a stock, because sellers will need to move their shares to the system to settle the deal.”

A BYD spokeswoman told The Wall Street Journal yesterday that any reductions of major shareholders’ stakes are subject to an equity declaration with the Hong Kong stock exchange. “The company is currently operating normally,” she said.

The stake held by Berkshire in BYD remains unchanged as shown by data available to BYD, the Securities Times newspaper quoted an unidentified official at the securities affairs office of BYD as saying yesterday.

BYD’s H shares hit an all-time high in late June after nearly doubling from a March low, amid soaring electric vehicle sales in China and new stimulus measures from the government to boost auto consumption.

BYD managed to navigate supply chain disruptions caused by COVID-19 lockdowns to post record monthly production and sales in May. The firm more than quadrupled its sales of hybrid and electric passenger cars in the first six months this year to 638,157 vehicles, surpassing the global deliveries of Tesla Inc.

Analysts expect BYD to sell 1.5 million vehicles this year, doubling from 2021, with its vertically-integrated business structure giving it a lead over rivals. (SD-Agencies)