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As Xi Jinping consolidates power, Chinese stocks with ‘emperor’ in their names are shining

Chinese investors have a history of betting on stocks because of their names. Stocks with ‘emperor’ or ‘king’ in their name saw outsized gains and a spike in trading volumes on Monday.

business Updated: Feb 26, 2018 17:15 IST
Bloomberg
Bloomberg
Bloomberg
Emperor stocks,Chinese stocks,Chinese shares
The push to remove presidential term limits from China’s constitution would allow Xi to rule beyond 2023, and further cement his status as the country’s most powerful leader in decades.(Chris Ratcliffe/Bloomberg)

What’s the trade on China’s move to let President Xi Jinping stay in power indefinitely? Some investors may have decided that it’s buying shares in companies with “king” or “emperor” in their names.

While stocks traded on China’s mainland largely tracked Friday’s advance in the U.S., firms like Shenzhen Emperor Technology Co. saw outsized gains, with the southern China-based maker of smart-card systems surging 7.4% on Monday, the most since the start of November. Trading volume in the stock also spiked, to nearly five times what it was on Friday.

Likewise, shares of Harbin Viti Electronics Co., which has a Chinese name that means “powerful emperor,” jumped 4.4%, and Vatti Corp., a stove and water heater manufacturer called “Chinese emperor” in Mandarin, rose 1.7% to a three-week high. The shortened name for Jiangxi Huangshanghuang Group Food Co., which climbed 2.9%, roughly translates as “king of kings.”

Even Shanghai Emperor of Cleaning Hi-Tech Co. got a boost, rising 3.3% compared with the benchmark index’s 1.2% climb.

“Some investors might be deliberately highlighting the connection to lure more people to buy the shares so their holdings would increase in value,” said Yin Ming, vice president with Shanghai-based Baptized Capital. “We’ve seen similar speculative trades in the past.”

Chinese investors have a history of betting on stocks because of their names. Traders in the $7.7 trillion market, which is dominated by mom-n-pop investors, flocked to a stock whose name sounded like “Trump Wins Big” to Mandarin speakers as the U.S. president secured victory in November 2016, while one called “Aunt Hillary” sold off.

When China said it would build a new economic area and city near the capital in April last year, companies with “Beijing,” “Development,” “Construction,” and even “Cement” in their names benefited.

The push to remove presidential term limits from China’s constitution would allow Xi to rule beyond 2023 and further cement his status as the country’s most powerful leader in decades.

Since the announcement on Sunday, social media has been weighing in with posters both lauding -- and lampooning -- the move, and some keying off the idea it would give Xi emperor-like status. The Communist Party congress in October had already elevated the president to a level that put him alongside the nation’s most vaunted political figures.

First Published: Feb 26, 2018 17:11 IST