A few Chinese meme stocks whose names are related to South Korea jumped as traders sought to cash in on a brief declaration of martial law in the nation.
Beijing Hanjian Heshan Pipeline jumped by the 10% limit in Shanghai Wednesday as the building materials firm’s name in Chinese implies “building the river and mountains of Korea”.
Kingenta Ecological Engineering Group and Dongguan Golden Sun Abrasives, whose names start with a character which is the surname “Kim” in Korean, also rose by at least 6% before paring the advance.
The gains in these shares are not rooted in any bets on the turn of events in Korea. As President Yoon Suk Yeol’s sudden declaration of martial law Tuesday — which was later revoked — put a spotlight on the nation’s assets, some traders tried to gain from the development by investing in the meme stocks.
Onshore speculators tend to find proxies to attract attention and pump up trades related to global headlines. The strategy works as most of them lack an easy way to directly buy and sell single stocks outside of Hong Kong and the mainland.
Typically they turn to stocks based on homophones — words that sound similar to another name or a phrase. In run up to the US election, a hot meme stock was Wisesoft, a software maker that sounds like “Trump Wins Big”.
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Others that gained viral popularity included one that sounded like “Harris”.
In 2023, retail traders chased shares with dragon-related names heading into the Year of the Dragon in the Chinese zodiac.
