As the U.S. presidential election approaches, Chinese investors are enthusiastically purchasing shares of Wisesoft Co., a Shenzhen-based company known for its air traffic control software. The stock’s surge is fueled by its Chinese name, “Chuan Da Zhi Sheng,” which translates to “Trump wins big,” highlighting the growing interest in the election’s outcome.
Wisesoft’s Stock Surge
In a remarkable display of investor sentiment, Wisesoft’s shares have hit the daily limit for three consecutive days. This rally coincides with recent reports indicating that Trump’s media company, which operates Truth Social, has surpassed Elon Musk’s X in market valuation. As a result, Wisesoft’s stock surged by 10% on both Monday and Tuesday, contributing to a weekly gain of over 30%, according to Bloomberg. This uptick occurred even amid a weaker overall market.
A “Trump Concept Stock”
Despite generating over 90% of its revenue from China and having minimal ties to the U.S., Wisesoft is being referred to as a “Trump concept stock” by some retail investors. This label stems from its name and its perceived connection to Trump’s potential electoral success. The stock has doubled in value over the past month to 19.98 yuan (approximately $2.80), while the CSI300 index, which tracks major stocks in Shanghai and Shenzhen, saw only a modest rise of 0.2% and a 1% decline in the same period.
Historical Patterns of Stock Movement
The recent surge in Wisesoft’s stock isn’t the first instance of such behavior linked to Trump. Back in July, following an assassination attempt on him, the stock soared nearly 10%, hitting its daily limit. Additionally, during President Joe Biden’s first TV debate, often called the “debate disaster,” Trump’s popularity surged, contributing to similar stock movements.
Historically, in 2015, as Trump approached the 2016 election, Wisesoft’s stock skyrocketed to over 47 yuan per share before plummeting to 16 yuan in less than a month. The stock experienced volatility in subsequent years, ultimately stabilizing below 20 yuan by early 2018.
Investor Behavior and Market Maturity
“It’s fair to say that China’s stock market still lacks maturity, and investors often act irrationally,” commented Wang Zichen, a researcher from Beijing. Experts note that while interest in the U.S. presidential election is peaking due to the tight race, the enthusiasm driving investments can seem quirky or illogical.
Wisesoft’s stock exemplifies a trend in China’s A-share market, where retail investors often buy shares based on perceived connections to significant events rather than the actual performance of the company. This pattern is frequently observed during tech trends, regulatory shifts, or major global occurrences.
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