vested
President-concept stock bursts in no timeby Ivan Tong
It is traditionally regarded as difficult to invest in a stock market that's largely influenced by the political arena.
However, it is really rare to see any political leader-related stock in the market like FIH Mobile (2038), a subsidiary of Taiwan's Hon Hai Precision Industry, which just experienced a roller coaster ride in prices over the last few days.
The mobile handset maker
surged nearly 15 percent after Apple unveiled the iPhone 11 last week. However, the sharp increase in the stock's price had nothing to do with the release of new iPhone but was a result of its founder Terry Gou Tai-ming quitting the opposition Kuomintang party, sparking hopes he would stand in next year's presidential election as an independent.
But sadly, the news proved only a short-term stimulus, with the speculation lasting just a few days.
A day before the September 17 deadline to register for the presidential election, Gou suddenly announced he was pulling out of the race.
While the news may have dismayed Gou's supporters, who were hoping he would run for the presidency, what matters more is that Hong Kong's retail investors might have lost a lot of money after speculating on FIH Mobile shares on the back of the news.
Retail investors will always be at the losing end if they enter the market to buy stocks related to Cross-Strait politics based on some news.
FIH Mobile dived more than 23 percent yesterday morning and ended 20 percent lower, almost erasing all of its gains made over the last few days.
A successful and astute businessman who founded Hon Hai, better known as Foxconn, back in 1974, Gou is worth billions but is a political novice, just as Donald Trump was before becoming the president of the United States.
It is a shame he's not been as lucky in politics as Trump.
Earlier this year, he rejoined the KMT after a gap 19 years in the hope of running against incumbent Tsai Ing-wen of the Democratic Progressive Party.
However, the battle between contenders within the pan-Blue coalition was a bitter one, like dogs fighting over a bone.
The 68-year-old Gou lost to Kaohsiung mayor Han Kuo-yu in the party's presidential primary in July, because of the latter's popularity.
In the first place, it would not have mattered if Tsai, Han and Gou had all competed for presidency on an equal footing, like the three legs in a tripod.
But in this way, the battle between Han and Gou will benefit the incumbent president who is already on the verge of victory having cashed in on popular sentiment over the protests in Hong Kong against the extradition bill.
She has a greater chance of winning if Han and Gou are at odds.
From a political perspective, now that Gou has left the party, he has extremely little room to snatch votes from Tsai and Han if he goes it alone. It's better for him to retreat in the face of a rushing torrent instead of struggling to survive.
In addition, there might be another reason why Gou decided to head for the door, which he is not willing to speak about.
Gou is first and foremost a businessman, with a lot of interests in the mainland. Earlier, there was news that Foxconn, which is a major Apple supplier, had
reported a better-than-projected net profit in the second quarter on the back of orders from China's tech titan Huawei.
And from the perspective of Cross-Strait politics, though Gou and Han are both pro-China, if Beijing had a choice,
it would prefer Han to run for the election, as the mayor is much more popular than Gou.
Therefore, we cannot rule out the possibility that Gou choose not to run for presidency after taking external politics and internal business into consideration.
Shares of all Foxconn-related stocks slumped yesterday on the news.
In the Taiwan stock market, Hon Hai Precision Industry dipped about 1.84 percent, in the A-shares market, Foxconn Industrial Internet dropped 4.77 percent, while FIH Mobile in Hong Kong plummeted 20 percent. In addition, FIT Hon Teng (6088) also fell 3.63 percent.
Among them all, FIH Mobile saw the biggest fluctuation.
If you are well versed in Taiwan's politics, you will know that there's not much scope for speculation on FIH Mobile as a president-concept stock.
Source: The Standard
http://www.thestandard.com.hk/section-n ... 0918&sid=2
It's all about "how much you made when you were right" & "how little you lost when you were wrong"