Source: eCompany Author: Han Zhongnan On June 25th, the Hong Kong Stock Exchange disclosed that Berkshire Hathaway sold 2.0175 million shares of BYD Company Limited on June 19th, with an average reduction price of HKD 234.57 per share, cashing out approximately HKD 473 million, and the shareholding ratio decreased from 6.18% to 5.99%. It is worth noting that on June 11, Berkshire Hathaway just made a reduction and cashed out HKD 311 million. Reviewing the previous information, since the first reduction of BYD in August 24, 2022, the "stock god" Buffett has reduced his holdings of BYD many times. The shareholding ratio of Berkshire Hathaway has been adjusted from 19.92% to the current 5.99%. Some strategic analysts said that once Berkshire Hathaway's shareholding ratio of BYD drops to 5%, Buffett's reduction speed may accelerate. On June 25th, BYD A shares rose by 1.63%, closing at RMB 254.01 per share, and Hong Kong stocks rose by 0.84%, closing at HKD 239.60 per share. In the Berkshire Hathaway shareholder meeting held in May this year, Buffett mentioned BYD, saying that BYD and Costco were the stocks that he and Munger worked together for these years and Munger most firmly advocated buying. Talking about why he reduced holdings of BYD, Buffett said that Berkshire Hathaway's investment in BYD was similar to the investment in Japan five years ago, which was a large investment that was rare outside of the United States. In the future, he hopes to focus more on the United States. In fact, recently, not only has Buffett been continuously reducing his holdings of BYD, but his favorite "apple" has also been greatly reduced. The latest holding situation submitted by Berkshire Hathaway to the US Securities and Exchange Commission (SEC) shows that in the first quarter of 2024, Buffett reduced his holdings of Apple Inc. by about 116 million shares, reducing his holdings of Apple from 49.3% at the end of 2023 to 40.3%. Analysts pointed out that judging from the portfolio adjustment actions, Buffett is withdrawing from the technology sector and returning to the industries he was familiar with before. The most obvious change is that Buffett has re-established a large position in Chubb Ltd. which he previously owned. Buffett also said in a recent letter to shareholders, "Property and casualty insurance provides the core protection for Berkshire's health and growth." "Only take a swing when conditions are right," Buffett believes that unless he can find investment standards with low risk and lucrative returns, he will not spend this money.

The Hong Kong stock market suddenly expanded its decline at the opening in the afternoon.

The Asia-Pacific market experienced a general decline.

In the afternoon, $Hang Seng Index (800000.HK)$ suddenly fell below the 20,000-point mark, dropping more than 2%; furthermore, $Hang Seng TECH Index (800700.HK)$ also expanded its decline.

$FTSE China A50 Index Futures(NOV4) (CNmain.SG)$ After the morning session rose sharply, it also took a dive, dropping sharply in a straight line.

In terms of individual stocks, $MEITUAN-W (03690.HK)$ Fell more than 7%, $JD-SW (09618.HK)$ Fell more than 4%, $LI AUTO-W (02015.HK)$ It fell nearly 4%.

$ZHONGSHENG HLDG (00881.HK)$Dropped more than 7%, once dropped nearly 12% during the trading session. From the news perspective, Zhongsheng Hldg announced that the company has signed a preliminary agreement with Chongqing Sokon Industry Group Stock, agreeing to further negotiate on the cooperative distribution of its new energy autos.

In addition, the Asia-Pacific markets collectively experienced a sell-off, with $Nikkei 225 Index (.NKY.US)$ dropping by 1% at one point. $Korea Composite Index (.KOSPI.KR)$ It fell nearly 2%.

In fact, after the end of the US election, due to the continued strength of the USD Index and "Trump trades" such as Bitcoin, many countries' markets have experienced volatile trends. In addition, the uncertainty of Trump's policies after taking office has also exacerbated market fluctuations.

Zhang Yansheng, a researcher at the Chinese Academy of Macroeconomic Research, believes that Trump's unconventional methods such as 'withdrawing from agreements' disrupt the international order, leading to increased market volatility due to his non-traditional style. He is unwilling to take on the responsibility of providing international public goods, and these policies may enhance the US economic competitiveness in the short term but could weaken its global leadership, leading to reduced trust in the US by Europe, Japan, South Korea, and others.

In terms of A shares, the SSE Composite Index, Star Market, and the Bei 50 Index are showing a downward trend.

Wang Youxin, a senior researcher at the Bank of China Research Institute, believes that the A-share market's ability to withstand external shocks will gradually strengthen after short-term fluctuations, influenced by the return to economic fundamentals. The implementation of a comprehensive set of pro-growth policies domestically is expected to stabilize the economy and mitigate external fluctuations.

Top brokerage firms: Hong Kong stocks still have very strong attractiveness from a global perspective in terms of valuation.

Citic Securities' research report points out that looking ahead to 2025, A-shares are currently at the starting line of an annual marathon rally. Stabilization of core city property prices and recovery in social financing growth will act as the starting gun. Domestically, credit cycles, macro prices, and A-share profits are all set to see a new upturn in their cycles. A new starting point for A-share investment and financing ecology, investor ecology, and product ecology has been reached.

The relay of funds from individual investors to institutional investors will be the main driver of the market. ETFs will become important allocation tools, and the market style dominance will gradually shift from individual investors to institutional investors during the marathon market rally. In the marathon market, high-quality growth, domestic consumption, and mergers and acquisitions will become the three important tracks.

Furthermore, Citic Securities' research report points out that this year, under a series of policy releases in China, the trading environment for Hong Kong stocks has significantly improved, with a reversal of pessimistic sentiment. Even after a recent strong rally, Hong Kong stocks still have very strong attractiveness from a global perspective. Especially in 2025, with expectations of improved revenue growth rates for major broad-based indices in Hong Kong compared to this year, and significant easing of performance pressure, the cost-effectiveness of valuation and profit match in Hong Kong stocks is even more prominent.

Looking ahead, as the influence of southbound funds in the Hong Kong stock market continues to rise, the growth and financial sectors in its preferred allocation may enjoy better liquidity support. In addition, the future trend of the RMB against the USD exchange rate will mainly be driven by the relative changes in the economic fundamentals of the two countries; there is no need to overly worry about foreign capital continuing to flow out of the Hong Kong stock market due to potential trade disruptions.

Looking ahead to 2025, as a series of policies in our country gradually take effect and investor expectations continue to improve, it is predicted that the Hong Kong stock market will usher in a reversal. Suggestions include focusing on: 1. Non-bank financials with strong beta characteristics, especially insurance and the Hong Kong Stock Exchange; 2. The technology and consumer sectors are expected to experience sustained valuation recovery trends, including internet, consumer electronics, biotechnology, and education.

Editor/Rocky