Failed Candidate Unification?... Stocks Related to Ahn Cheol-soo Continue to Decline

Ahn Cheol-soo, leader of the People Party, who declared his candidacy for Seoul mayor, is announcing Seoul's real estate policy at the National Assembly on the 14th. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Koh Hyung-kwang] Stocks known as the so-called ‘Ahn Cheol-soo theme stocks,’ including AhnLab and Sunny Electronics, have recently continued to decline. After Ahn Cheol-soo, leader of the People’s Party, announced his candidacy for the Seoul mayoral by-election, these stocks surged for a while but lost momentum as the possibility of candidate unification fell through.

According to the Korea Exchange on the 15th, AhnLab was traded at 86,800 KRW on the KOSDAQ market as of 9:40 a.m., down 0.3% from the previous trading day. This marks five consecutive trading days of decline since the 11th. During this period, AhnLab’s stock price dropped by nearly 20%.

AhnLab, where Ahn holds the largest shareholder stake (18.6%), is considered a representative Ahn Cheol-soo-related stock. After Ahn officially declared his candidacy for the Seoul mayoral by-election on the 20th of last month, the stock surged sharply. It rose 17% the very next day, the 21st, and continued to climb almost every day except one until the 8th of this month. During this period, the stock price increased from 63,800 KRW to 102,900 KRW, a rise of 60%. The fact that Ahn is mentioned as a leading candidate for the next Seoul mayor appears to have acted as a positive factor for the stock price. Currently, Ahn holds the highest support rate among opposition candidates for Seoul mayor.

However, as prospects emerged that unification among opposition candidates for Seoul mayor would be difficult, the stock price began to falter. Meetings with Oh Se-hoon, former Seoul mayor and another leading opposition candidate, were repeatedly postponed, and with former lawmaker Na Kyung-won also declaring candidacy in the meantime, the calculations for candidate unification became more complicated, causing Ahn Cheol-soo-related stocks to lose upward momentum.

Sunny Electronics, another Ahn Cheol-soo-related stock, shows a similar trend to AhnLab. The stock price, which was 4,050 KRW on the 18th of last month, rose 20% the next day to 4,830 KRW and surged to 5,260 KRW on the 7th of this month. However, from the following day, the upward trend weakened, and the stock price has fallen for five consecutive trading days until the previous day, dropping to 4,760 KRW. Sunny Electronics was grouped as an Ahn Cheol-soo theme stock because a former executive was previously affiliated with AhnLab.

Experts advise investors to exercise special caution as political theme stocks tend to move based on speculative demand and rumors, regardless of the company’s fundamentals. A financial investment industry official said, "Due to the nature of stocks mentioned as political theme stocks, they are unrelated to the politician’s business and show sharp fluctuations in stock prices regardless of corporate performance," adding, "There are many cases where investors suffer significant losses by approaching these stocks recklessly."