Retail Investors Take Cue From TV Show

Remember that Chinese retail investors dominate the market.

SCMP: Why even a TV serial can cause a stock rally in China, and what it means for global investors
Life imitated art in Shanghai when prime-time drama Ode to Joy caused frenzied investors to drive up the shares of Guizhou Redstar Developing, a producer of inorganic chemicals. The serial, based on the story of five young office workers’ lives in Shanghai, became the talk of the town as it addressed thorny social issues. But stock punters read deeper into the storyline, taking their cue from an attempt by one of the protagonist’s employers to acquire a firm bearing the name of Redstar.

Shares of Guizhou Redstar surged to the 10 per cent daily upper limit on three consecutive trading days – Friday to Tuesday – closing at 12.33 yuan (HK$14.63). Trade in the chemical company has been suspended since Wednesday.

...The TV drama sparked speculation that Dalian Wanda, China’s largest commercial property developer, had targeted Redstar for a backdoor listing on the A-share market.

“Investors just don’t care whether the talks of such mergers are true,” said Ivan Li, a trade dealer at Everbright Securities. “They just see it as an opportunity to chase a rally, Redstar in this case.”
A-share mispricings galore.

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