Lenovo Group (HKG: 0992) shares are down 9% in Hong Kong today. Which brings us back to our major problem with trying to trade these China based stocks. We rarely do see market moving information in real time. It’s just a feature of the language and distance related problems. We’re thus often enough left rather blind. We can see that something has happened, yes, because we can see the price changes. But as to why we’re often at a loss. And worse than that, we very rarely indeed get any warning, or that information in real time. So, trading Mainland based stocks is really something of a gamble given the information flow to us.
As to what’s done at Lenovo: “Lenovo Group Limited is an investment holding company principally engaged in personal computers and related businesses. The Company’s main products include Think-branded commercial personal computers and Idea-branded consumer personal computers, as well as servers, workstations and a family of mobile Internet devices, including tablets and smart phones. The Company operates its business through four geographical segments, including China, Asia Pacific (AP), Europe, the Middle East and Africa (EMEA) and Americas (AG). The Company also provides cloud service and other related services.” Lenovo has aggressively bought up western brands as PCs became commoditised – the IBM Thinkpad business for example. And why not? There’s money to be made in being in a commodity business as long as you’re there in volume.
Lenovo Group share price from Google Finance
But as with the last time we looked at Lenovo Group: “Lenovo Group (HK: 992) (OTCPK: LNVGY) shares are up 8.5% in Hong Kong, 10.99% on the US listed ADR. There’s little specific to drive such a price change – and in high volumes too – so we should conclude that the price change is the result of a change in sentiment by investors rather than due to some substantial or verifiable trigger. That’s not a wholly satisfying explanation, sure, but we do have to always recall that market prices are the agglomeration of what market traders think prices should be. Sure, over time we’re really very sure that these zero in on the best and finest estimation of what prices should be but that does leave room for some byways and sideturns in the short term.”
We never did get – in English and out here – a very good description of why Lenovo moved that 8.5% up. Not even days after the event – it was just left as one of those things. Which is, as above, one of the problems with trading these China based stocks. We don’t get the information to know why they moved, let alone to try to forecast how they might move.
