Moon-Kim Summit Raises Hope For Joint Projects, Boosting Of Bourse: Experts

With peace efforts involving North Korea gaining momentum, all eyes are focused on whether the third inter-Korean summit will lead to a breakthrough in the nuclear stalemate and help spur joint economic projects.

SEOUL, (UrduPoint / Pakistan Point News - 18th Sep, 2018 ) :With peace efforts involving North Korea gaining momentum, all eyes are focused on whether the third inter-Korean summit will lead to a breakthrough in the nuclear stalemate and help spur joint economic projects.

Though the top-level talks between the leaders of two Koreas have already been reflected in the market, any clear signs of headway in various exchange projects will add vitality to the market, experts here said Tuesday.

Earlier in the day, South Korean President Moon Jae-in embarked on a three-day trip to Pyongyang to hold talks with North Korean leader Kim Jong-un.

"The Moon-Kim summit itself will not resonate much as it is far from a totally fresh event from the market's point of view, but investors are closely following developments to see if the meeting lays the groundwork for actual inter-Korean economic cooperation," said Lee Kyung-min, an expert at Daeshin Securities.

"One of the key preconditions for local business entities to enter the North is the lifting of international sanctions," he stressed. Lifting of sanctions, in turn, is contingent on progress made in getting Pyongyang to give up its nuclear weapons program.

Particularly noteworthy is that Moon was accompanied by the country's four leading business tycoons, including samsung Electronics Vice Chairman Lee Jae-yong, as well as heads of major infrastructure firms such as KORAIL, the national train operator, and the Korea Tourism Organization.

Detailed itineraries of the business leaders are not known, but Yoon Young-chan, senior secretary to the president for public relations, said they "will have separate meetings with relevant officials in the North," adding that they "will discuss economic and business issues." Since the first summit between Moon and Kim in April, the two Koreas have been working together to reconnect their rail and road links.

"Should inter-Korean exchanges accelerate, economic benefits would go far beyond the infrastructure sector," said Kim Il-hyuk, an expert at KB Securities.

Pointing out that approval ratings for U.S. President Donald Trump improved when Washington's relations with North Korea got better, and that chances are still there for a second round of meeting between Trump and Kim Jong-un, the analyst stated that the Seoul market could enjoy upward momentum for at least a couple of months going forward.

Despite escalating trade disputes between the U.S. and China, the Seoul index rose 0.26 percent to 2,308.98 on Tuesday.

Major shares related to inter-Korean projects finished mixed following rallies in recent sessions ahead of the inter-Korean summit.

Hyundai Construction fell 2.47 percent to 67,000 won (US$56.92), and Hyundai Rotem, a South Korean railway system and plant equipment firm, skidded 2.37 percent to 30,850 won.