Shares in export trader Li & Fung continued to fall yesterday even after the group disputed a UBS research report over accounting policies.
The stock was the biggest loser among the Hang Seng Index constituent stocks yesterday, slipping 44 HK cents, or 2.64 per cent, to HK$16.20, against a 0.94 per cent gain in the index to 23,118.07.
The stock has chalked up a 7.2 per cent loss since UBS issued a report on Wednesday slashing its profit forecasts for the next three years and its target share price to HK$9 from HK$16.50. UBS said Li & Fung's recent decision to adopt a new accounting policy, or the so-called HKFRS 3 (revised), 'might not fully reflect the profitability of operations' and that it 'may distort a declining margin trend'.
In a rare move disputing analysts' views, Li & Fung said 'these statements are misleading' and that the new rule was mandatory for all companies.
Li & Fung's group president and chief executive Bruce Rockowitz said writers of the report, UBS analysts Spencer Leung and Erica Poon Werkun, e-mailed him 'a couple of questions' and turned down his offer to meet for discussions.
He was not aware of the contents of the report and was surprised following its publication.