In the lead-up to the upcoming U.S. presidential election, even Chinese stocks are joining in on the excitement. Two mainland Chinese stocks have seen a sharp rise recently due to their names being phonetically linked to the U.S. presidential candidate “Chuanpu” (Trump) and related events.
Some Chinese retail investors have once again placed their bets on a stock listed in Shenzhen, called “Chuanda Zhisheng” (Wisesoft). This stock has hit its daily limit up for two consecutive days.
“Wisesoft” is a software manufacturer specializing in air traffic control software development. Over 90% of the company’s revenue comes from China with little to no business ties to the United States, yet some retail investors see it as a “Trump concept stock”.
The company’s stock price surged by 10% on Monday and Tuesday (October 28 and 29). Meanwhile, the CSI300 index tracking blue-chip stocks in Shanghai and Shenzhen rose by 0.2% on Monday and fell by 1% on Tuesday.
Over the past month, the stock of “Wisesoft” has doubled, reaching 19.98 yuan, with a growth rate 20% higher than the market index.
This is not the first time the company has experienced a sharp increase attributed to Trump. In June 2015, just a few days before Trump officially announced his candidacy for the 2016 Republican nomination, the stock soared to over 47 yuan per share, only to drop to 16 yuan within less than a month.
The stock then went through a roller-coaster ride before gradually calming down in early 2018, maintaining a price below 20 yuan since then.
During times when technology, policy changes, or global events become hot topics, Chinese retail investors often drive up certain stock prices based on perceived connections rather than their business fundamentals. China has over 200 million retail investors.
The U.S. presidential election is set to take place next Tuesday (November 5). Recent polls in the United States suggest a tight race between Trump and Vice President He Jinli.
After an assassination attempt on July 13, which saw Trump shot in the right ear and bloodied but showing resilience as he raised his fist while being escorted to safety by a secret service agent, there was a brief peak of attention on “Chuanda Zhisheng” stock. In response, the stock hit the trading limit after opening on Monday, July 15, but the gains were wiped out within two days.
Another Chinese acoustics component company named “Goertek” also saw a significant rise after the assassination attempt, as the Chinese name sounded similar to “cutting ears”.
This company has been listed on the Shenzhen Stock Exchange since May 2008.