Different from the Past

 

Many stocks related to inter-Korean economic cooperation fell on September 18 when the third inter-Korean summit was held.

On September 18 when the third inter-Korean summit was held, the Korean stock market saw ups and downs of the stocks involved in economic cooperation between North and South Korea. Some stocks such as POSCO M-Tech surged amid a sharp increase in trading volume, but many stocks related to inter-Korean economic cooperation fell. Market analysts attributed this to the international sanctions against the North and the calm reactions of investors who experienced steep fluctuations of inter-Korean economic cooperation stocks at the two previous inter-Korean summit talks in April and May.

The stock price of POSCO M-Tech soared 17.95 percent on the day, closing at a 52-week high of 8,870 won. POSCO M-Tech is a subsidiary of the POSCO Group, which operates POSCO's magnesium and ferrosilicon plants. POSCO affiliates generally climbed. POSCO gained 1.19 percent, while POSCO Chemtech, another POSCO affiliate, rose 3.13 percent. Some market analysts say that as POSCO chairman Choi Jung-woo accompanied President Moon Jae-in to Pyongyang, anticipation for POSCO’s benefits from inter-Korean economic cooperation projects boosted the stock prices of POSCO affiliates. Choi expressed his strong will for inter-Korean economic cooperation projects, including infrastructure construction in North Korea and the reconstruction of North Korea’s steel industry.

However, Hyundai Rotem, which is considered one of the main beneficiaries when the two Koreas begin to connect their railways, lost 2.37 percent. The stock price of KEPCO, which will be in charge of electric power generation projects in North Korea, fell 1.01 percent despite CEO Kim Jong-kap’s visit to North Korea. Stock prices also slid for Hyundai E&C (-2.47 percent), a leader of the Korean construction industry, Shinwon (-2.93 percent) connected to the Gaeseong Industrial Complex in North Korea, and Ananti (-1.91 percent) involved in Mt. Geumgang tour programs.

On the morning of the day, Yoon Young-chan, chief press secretary at Cheong Wa Dae, took a prudent stance on the issue of inter-Korean economic cooperation, saying, "We anticipate that there may be talks and discussions about future possibilities rather than projects that can start very soon."

Some market observers noted what affects stock prices are the prospects of real benefits rather than vague expectations for economic cooperation, the realization of profits by selling stocks whose prices has risen, and corporate earnings among others.

Previously, at the first inter-Korean summit held on April 27, the stock prices of companies involved in various sectors of inter-Korean economic cooperation rose on April 30, three days after the summit.

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