HONG KONG (Reuters) - Shares of Foxconn and its Shanghai and Hong Kong-listed units soared on Thursday as investors cheered news that the chairman of the world’s largest contract manufacturer will run for president of Taiwan.
Gou, Taiwan’s richest person with a net worth of $7.6 billion according to Forbes, said on Wednesday he would join the already competitive presidential race, and take part in the opposition, China-friendly Kuomintang (KMT) primary elections.
Foxconn in a statement on Tuesday said Gou would remain chairman, though he planned to withdraw from his company’s daily operations.
On Wednesday, it said daily operations are handled by a team of professional managers, indicating that business would continue as usual.
“In terms of economic fundamentals, Taiwan stocks are not bad,” said Cathay Futures Vice-President Anderson Chien.
“If Gou runs for the election, the market may draw parallels to the rally in the U.S. stock market after U.S. President Trump won in 2016,” Chien said, referring to Donald Trump similarly being a businessman before turning attention to the presidency.
Foxconn, formally Hon Hai Precision Industry Co Ltd, climbed as much as 5.9 percent to T$97.20, the highest since October 2018. The stock is up more than 8 percent so far this week.
Handset maker and Foxconn unit FIH Mobile Ltd jumped as much as 58 percent to HK$2.23, its highest since February 2018, and was on track for its sixth consecutive session of gain. The stock has soared more than 100 percent so far this week, heading for its best week since its February 2005 listing.
“Punters are excited by the news and that boosted the stocks of the group of companies,” said Alex Wong, a director at Ample Finance. However, he said, a correction - when a stock price falls as investors in tandem sell at a profit - could come at any time.
FIH’s stock ranked as the second-biggest percentage gainer in early trade, tracking a rally in its parent Foxconn. It has outperformed the Hang Seng Commerce & Industry Index sector by 55.2 percentage points in the past month.
Shares in Foxconn Industrial Internet Co Ltd, a subsidiary of Foxconn, soared to the maximum-allowed limit of 10 percent, hitting their highest since June 2018.
Foxconn Industrial has jumped 25 percent this week and nearly 70 percent so far this year, far outpacing the broad market.
The Hong Kong-listed shares of Foxconn Interconnect Technology Ltd, Hon Hai’s electronic and optoelectronic connectors maker unit, rose as much as 14.3 pct to the highest since February 2018. The stock is up 15 percent this week.
Reporting by Donny Kwok and Jeanny Kao; Writing by Anne Marie Roantree; Editing by Christopher Cushing