Terry Gou's Taiwan presidential run fuels rally in Foxconn shares

Foxconn Interconnect Technology

18/04/2019 06:27

HONG KONG, April 18 (Reuters) - Shares of Foxconn  2317.TW 
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.
 urn:newsml:reuters.com:*:nL3N21Z151
    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
 2317.TW , 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  2038.HK 
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
 .HSNC  by 55.2 percentage points in the past month. 
    Shares in Foxconn Industrial Internet Co Ltd  601138.SS , 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  6088.HK , 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)
 ((annemarie.roantree@thomsonreuters.com; +852 97387151; Reuters
Messaging: annemarie.roantree.thomsonreuters.com@reuters.net))