Sigong Tech and Others Open Lower Compared to Previous Day
Reflecting Disappointment Over Busan Expo Failure
With Riyadh, Saudi Arabia selected as the host city for the 2023 World Expo, the stocks of companies such as Sigong Tech, which were considered beneficiaries of the 'Busan Expo,' plummeted as soon as the market opened the day after the vote on the 29th.
As of 9:20 a.m. that day, Sigong Tech was trading at 5,040 KRW, down 21.62% from the previous day, and Messe Isang was trading around 2,445 KRW, down 8.77%. Both companies are domestic exhibition businesses (MICE) and exhibition organizers, respectively.
On the morning of the 29th, at the Busan Citizens' Hall in Dong-gu, Busan, citizens expressed their disappointment when Busan's bid for the 2030 Expo failed during the citizen support rally for the successful hosting of the 2030 Busan World Expo. [Image source=Yonhap News]
In addition, Dongbang Seon-gi, a pipe and plant manufacturer considered a beneficiary of the new airport in Gadeokdo, Busan, was trading at 2,380 KRW, down 5.56%. This appears to reflect investors' disappointment due to the failure of the Busan Expo bid.
The day before the vote (the 28th), as expectations for hosting the Expo peaked, the stocks of beneficiary companies also soared. In the case of Sigong Tech, the stock price surged more than 13% during the session, triggering a VI (Volatility Interruption), a mechanism that temporarily applies single-price trading to individual stocks when the transaction price deviates beyond a certain range to mitigate sharp price fluctuations.
However, investor sentiment changed drastically after the voting results were announced. In the vote to select the host city held at the 173rd General Assembly of the International Bureau of Expositions (BIE) in Paris, France, Riyadh swept 119 votes to record an overwhelming first place. Busan, South Korea, received only 29 votes, and Rome, Italy, just 17 votes.
South Korea's Expo hosting strategy was to first defeat Rome in the first round of voting and then aim for a 'dramatic comeback' by overturning the vote difference against Riyadh in the second runoff. However, the vote difference was significant from the first round, and they ultimately had to face defeat.
Prime Minister Han Duck-soo said at a press conference immediately after the vote, "I feel sorry and bear a heavy responsibility for not meeting the overwhelming expectations of the people," adding, "We will humbly accept the results and continue to develop the new diplomatic assets gained by visiting all 182 BIE member countries."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
