Hyundai Merchant Marine Co. (011200) surged by the daily limit in Seoul trading, leading gains among companies that have businesses in North Korea, after South Korea agreed to hold government-level talks with the communist regime.
Hyundai Merchant, the biggest shareholder of Hyundai Asan Corp., which manages a resort in Mount Geumgang in North Korea, rallied 15 percent at 11:46 a.m. today, the most since Nov. 30, 2010. The stock is the best performer in the MSCI Emerging Markets Index. Romanson Co. and Shinwon Corp. (009270), two South Korean companies that operate plants in the Gaesong industrial complex, jumped at least 14 percent.
South and North Korea yesterday agreed to hold negotiations on reopening a jointly run industrial park in Gaesong, in what will be their first government-level talks since the complex was shut in April, marking the latest sign of easing tensions after months of hostility.
“Investors believe that South Korea has a bigger stake in the upcoming talks compared to ones held in the past,” Park Sung Hyun, an analyst at Hanwha Securities, said in Seoul. “The talks were also proposed at a time when the relationship between North Korea and China seems to be improving, giving a boost to investor sentiment.”
The North also proposed discussing re-opening North Korea’s Mount Geumgang luxury resort, which was closed in 2008 after its soldiers killed a South Korean guest.
The Kospi index fell 1.5 percent, poised for its lowest close since April 23.
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