A group of shares linked to North Korea climbed Tuesday following remarks by President Park Geun-hye calling for preparation for possible reunification of the two Koreas.
The so-called “unification-themed” stocks saw sudden price increases following the president’s remarks as investors chased them hoping for large gains.
Hyundai Merchant Marine Co., which operated tours in Geumgangsan Mountain in North Korea, led the advance. Shares in the country’s second-largest sea cargo carrier jumped 5.6 percent to close at 13,050 won on Tuesday, a day after the president’s first televised press conference this year. The stocks of Hyundai Elevator Co., the biggest shareholder of the shipping company, also rose 2.9 percent to 48,550 won.
Shares in companies that do business in North Korea also saw a rise in their stock prices.
Shinwon Corp., an apparel maker that operates a plant in Gaeseong industrial park, saw a rise of 1.7 percent to 1,150 won. Shares in Good People Co., an underwear maker, also climbed 1.4 percent to 1,385 on Tuesday.
On Monday, the president noted that unification with the North would be a “jackpot” for all Koreans and an opportunity for “our economy to make a great leap forward.”
The president also pledged to hold reunions for separated families across the border, creating a chance for improved ties between the two Koreas and also providing an upbeat mood in the market.
Despite the optimism, analysts said the rises attributed to the political remark could affect short-term prospects but won’t have long-term effects.
In the past, the North Korea risk has usually caused “marginal” trouble for the domestic financial market due to the so-called “learning effect,” they said.
When the North carried out a nuclear test in May 2009, the related stocks dropped as much as 6 percent in one day, but trading ended with no more than a 0.2 percent loss, data shows.
More recently, the shares tumbled when the communist country suddenly announced the closing of the joint complex in Gaeseong, but soon recovered.
“It’s not wise to see just the promise, not the actual data,” Lee Jae-hun, a market analyst at Mirae Asset Securities, told The Korea Herald, warning that the sudden gains may also mean sudden falls.
“Investors have expectations that the president’s remarks will have a dramatic effect, but as we’ve seen in the past it’s not likely, without actual figures, money injected (into) or generated by those companies,” he added.
By Oh Kyu-wook (
596story@heraldcorp.com)
