Chinese investors buy up a meme stock which sounds like ‘Trump Wins Big’ in Mandarin
This is not a standalone case. Chinese retail investors are known for trading in stocks based on homophones; words that sound similar to another name or phrase
Investors in China are buying into a stock which is not much known for its merits, but for its Chinese name “Chuan Da Zhi Sheng” which sounds like “Trump wins big” to Mandarin speakers, according to a Bloomberg report.
This comes less than a week before the US presidential elections.
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The software and equipment company with its English name being Wisesoft Co. saw its shares surge 30% over this week, despite the market in general sowing signs of weakness, according to the report which added that its now in overbought territory, based on its 14-day relative strength index.
Funnily, this same stock also rallied when Donald Trump won the 2016 election.
“Wisesoft’s name includes both Trump and him winning and that carries a special meaning for Chinese investors,” the report quoted Shen Meng, a director at Chanson & Co as saying.
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{{/usCountry}}This comes amid election-related reports that shows positive signs for Trump, he added.
Why are Chinese investors so interested in buying such stocks?
{{/usCountry}}This comes amid election-related reports that shows positive signs for Trump, he added.
Why are Chinese investors so interested in buying such stocks?
{{/usCountry}}This is not a standalone case. Chinese retail investors are known for trading in stocks based on homophones, which are words that sound similar to another name or a phrase, though the meaning won't be the same.
{{/usCountry}}This is not a standalone case. Chinese retail investors are known for trading in stocks based on homophones, which are words that sound similar to another name or a phrase, though the meaning won't be the same.
{{/usCountry}}An example would be retail traders going after stocks with dragon-related names while the Year of the Dragon in the Chinese zodiac came about.
{{/usCountry}}An example would be retail traders going after stocks with dragon-related names while the Year of the Dragon in the Chinese zodiac came about.
{{/usCountry}}However, the company has been making losses and had posted a wider net loss of 27 million yuan ($3.8 million) for the first nine months of the year compared to the same period of the previous year.
{{/usCountry}}However, the company has been making losses and had posted a wider net loss of 27 million yuan ($3.8 million) for the first nine months of the year compared to the same period of the previous year.
{{/usCountry}}“Historically, meme stocks don’t last long in China,” the report quoted Billy Leung, an investment strategist at Global X ETFs as saying. Investors “tend to overplay it,” he added.
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