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United Energy Group (HKG: 0467) down 38% - Beware Hong Kong listed stocks

The problem here is not with the jurisdiction, it’s with the information flow from it

Update : 14 Nov 2023, 06:16 PM

United Energy Group (HKG: 0467) shares are down 38% today. OK, well, that happens and when it does we should both note it and try to work out why. Which is where the problem is for us out here in the English speaking world. For while we can see the price change (Here, at the HK Exchange) there’s simply nothing telling us why this price move has happened.

Sure, we can look around and see what the company does. It’s an oil and gas exploration company. Significant assets in Pakistan, where it took over the old BP operations. Significant work being done in both Indonesia and Iraq as well. Well, OK. We’d not think that the oil price - or the gas price - has moved enough to change the business that radically. We’d be seeing things happening to BP and Shell if they had of course. Or, given the risk profile of at least one of those jurisdictions, perhaps there’s been some battle, or government action?

But here’s our problem. We don’t know. As far as the English language press (and globally that is) is concerned there simply is no news. All we know of is what the stock markets is telling us. There’s no release from the company, not directly or to the exchange.

united energy   

United Energy Group share price from Google Finance.

The stock exchange site says the same thing so it’s not a glitch in Google.

Which is our problem here. We really simply do not know why a third has been wiped off the share price at United Energy Group today. It’s a technical matter to do with a dividend payment? There’s something going on on the Shanghai exchange? War hsa broken out in Iraq? What?

Now, that a share price has moved and we don’t know why, well, that’s a pity. But now think a little more deeply. How can we invest in something if the information flow doesn’t explain a 38% share price movement? Think not of what has happened today but of how can we possibly predict what might happen tomorrow?

One thought is about this: “ UEG is a Hong Kong listed company but controlled by Zhang Hongwei, a majority shareholder in mainland China, who owns 71.7% of the company.” Perhaps he’s fallen out of political favour on the Mainland. Something that, again, we out here don’t know about. Or possibly it’s all entirely some other cause.

Our point here is that yes, there’s a substantial price movement here. But how can we trade it when we’ve not even the reason for the price change, let alone any information flow to enable prediction of the next one? It’s not that Hong Kong is a bad market, not at all. But that the information flow about Mainland related stocks listed there can be so thin.  

 

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