‘Trump victory’ meme stock surges in China as buzzwords outweigh fundamentals
‘It’s fair to say that China’s stock market still lacks maturity, and investors often act irrationally,’ think tank researcher says
Some of China’s retail investors are once again betting on a Shenzhen-listed stock with a company name suggesting that former US president Donald Trump will be victorious in his re-election bid, driving shares up to the daily limit for two consecutive days.
Shares of Wisesoft, a producer of air-traffic-control software, surged 10 per cent on both Monday and Tuesday. Meanwhile, the CSI300 index that tracks blue chip stocks in Shanghai and Shenzhen rose 0.2 per cent and fell 1 per cent, respectively.
The stock has doubled to 19.98 yuan (US$2.80) over the past month, against an around 20 per cent rise of the index on China’s stimulus plan.
The privately controlled Wisesoft – whose Chinese name “Chuan Da Zhi Sheng” resembles “Trump victory” – is sometimes regarded by some retail investors as a “Trump concept stock”, despite more than 90 per cent of its revenue being made in China and with little business ties with America.
And this is not the first time the company has ridden a Trump-related wave. In June 2015, just days before Trump formally announced his candidacy for the Republican nomination ahead of the November 2016 election, the stock skyrocketed to more than 47 yuan a share before tanking to 16 yuan in less than a month.
What followed was a roller coaster of ups and downs that eventually tapered off by early 2018, and the stock has remained under 20 yuan ever since.
