'CHINA’S LADY BUFFETT' Dumps 12 Stocks... Sign Of The Times?

"China's Lady Buffett," Ms. Liu Yang. Photo: iaireview.org

LIU YANG, chairperson of Atlantis Investment Management (HK), just cleared 12 key stocks from her firm's portfolio.

Why should investors care?

Because she is China’s top female fund manager, sitting on over 3 bln usd, and is nicknamed “China's Lady Buffett” in the People's Republic.

Is bearishness already impacting at the highest levels?

A Chinese-language piece in Sinafinance said that according to data from the Hong Kong Exchanges and Clearing Ltd – the holding company for the Stock Exchange of Hong Kong (SEHK) – Ms. Liu’s fund management firm last week sold all shares in 12 firms in a single day, effectively erasing their existence from the firm’s portfolio.

Market watchers were particularly taken aback by "China’s Lady Buffett's” actions given the fact that she has repeatedly predicted that the benchmark Hang Seng Index would end the year over the 25,000-point level.

The Index is currently trading at just over 19,000, a precipitous fall of over 28% from just five months ago, making the Hong Kong bourse one of the world’s biggest laggards this year.

Therefore, one can’t be too judgmental on Ms. Liu for her optimism earlier this year when things were looking much more cheery.

It just seems that unforeseen financial and budgetary crises on the global stage got in the way of her bullish forecasts.

Ms. Liu and her Atlantis fund management company sold all their shares in the following Hong Kong Kong-listed enterprises:

Buying Opportunity?  Ming Fai's 7 Magic General Manager David Tu (far right) listens to Ming Fai CFO Henry Keung during an investor luncheon earlier this year. Ming Fai was one of a dozen firms whose shares were dumped by 'China's Lady Buffett' Ms. Liu Yang last week despite the hotel and airlines amenities supplier reporting a nearly 40% bottom line jump in the first half.
Photo: Frances Leung, Aries Consulting

Property developer Renhe Commercial Holdings Co Ltd (HK: 1387); Shanghai Prime Machinery Co Ltd (HK: 2345); Shandong Weigao Group Medical Polymer Co Ltd (HK: 1066); Zhaojin Mining Industry Co Ltd (HK: 1818); hotel and airline amenities supplier Ming Fai International Holdings Ltd (HK: 3828); Ming Fung Jewellery Group Ltd (HK: 860); skincare firm Magic Holdings International Ltd (HK: 1633); CCTV security firm Nanjing Sample Technology Co Ltd (HK: 1708); Zhong An Real Estate Ltd (HK: 672); zipper maker Kee Holdings Ltd (HK: 2011); developer Silver Grant International Ltd (HK: 171) and Yantai North Andre Juice Co (HK: 2218).

On September 9, Atlantis Investment Management sold all shares it held in these 12 firms which span a wide swath of sectors – from property to mining, to retail jewelry and cosmetics to commercial-use technology.

This suggests that Ms. Liu is not particularly down on one sector or another.

Ming Fung Jewellery was also sold off by Ms. Liu Yang last week despite the firm's strong interim results earlier this year.
Photos: Ming Fung

When asked by reporters to comment on the move, and whether it was the result of financial troubles at Atlantis or a massive and sudden outflow of investor capital from the fund, an unnamed employee at the firm responded only with: “The marketing chief is away from Hong Kong at present.”

It was around a decade ago that Hong Kong-based English daily The South China Morning Post first coined the title “China’s Lady Buffett” in describing Liu Yang, a label which immediately proved it had staying power and coincided with the rapid rise of Ms. Liu’s fortunes.

China’s Lady Buffett has seen her fund’s net worth increase by seven-fold over the past 15 years, with an average annual return on investment a whopping 30%.

Over the past decade or so, Ms. Liu’s Atlantis Investment Management has been closely followed and supported by retail investors, and she has been sought out for countless media interviews over this period.

This has allowed her to attain something close to oracle-like status and Ms. Liu is often seen as one of the most authoritative local voices on where the Hong Kong capital markets are headed.

She has been one of the biggest cheerleaders for the Special Administrative Region’s bourse for years, and famously said in June of this year, after a series of major losing sessions for the Hang Seng, that the market had absorbed all the negative news out there and had “bottomed out,” with investors likely to enjoy the benchmark Index topping 25,000 points by the end of this year.

To further ensconce her position in the bullish camp, she also said early this summer that: “I am bullish on the mainboard once again.”

Liu Yang, 'China's Lady Buffett', said in June of this year, after a series of major losing sessions for the Hang Seng, that the market had absorbed all the negative news out there and had “bottomed out,” with investors likely to enjoy the benchmark Index topping 25,000 points by end-year.

Recently, she was also cited as saying: “If investors are sitting idly on cash, they should just close their eyes and make a few purchases. This will at least guarantee some income a year down the road.”

Simultaneously, she has been a major promoter of, naturally, her own fund firm, but also the major investments it had made and the firms it had stood by over the years.

But along came external factors such as the budget standoff in the US and the sovereign debt crises in various EU member states that have not only lingered longer than anticipated, but intensified as well.

Investors will be keen to monitor any news going forward on what exactly prompted Ms. Liu’s pullout from these dozen listed firms, and more importantly – how far off the mark will “China’s Lady Buffett’s” prediction of a 25,000-point plus year-end snapshot of the Hong Kong stock market end up being.

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