=MARKET BUZZ: Brilliance China Falls After BMW Report; Analyst Sees Overreaction
HONG KONG (Jul 12) -- Brilliance China Automotive drops 12.4% to HK$12, poised for steepest single-day loss since July 2015 amid concerns over future relationship with partner BMW in JV. Report in China's 21st Century Business Herald cites Premier Li Keqiang as telling reporters in Germany earlier this week that BMW will hold more than 50% in a joint venture project they agreed on earlier this week with Brilliance; while talks are still going on, the "German side" could ultimately hold more than 75%, report added. It's not clear from report whether BMW also looking to increase stake in JV. An investors relations officer at Brilliance China wasn't immediately available for comment. A BMW spokeswoman in Munich declines to comment "on state of ongoing discussions" in emailed statement. Guotai Junan analyst Toliver Ma says market "overreacting" to news reports and that speculation about opening up of China's automobile market tends to create volatility in stock prices. Note, earlier this week, BMW said its JV BMW Brilliance Automotive is boosting capacity at its two local production facilities in China's Liaoning province to 520,000 vehicles in 2019.
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