S.Korea stocks, won steady ahead of US-N.Korea summit outcome

0
24
 * KOSPI, won flat as Trump-Kim begin summit in Singapore * N.Korea-exposed shares rise, some edge down on
profit-taking * Potential peace treaty, successful summit priced in -
analyst SEOUL, June 12 (Reuters) - South Korean shares and the won
held in narrow ranges on Tuesday as investors awaited the
outcome of a historic meeting between U.S. President Donald
Trump and North Korean leader Kim Jong Un. The Korea Composite Stock Price Index (KOSPI) was
down 0.07 percent at 2,468.51 points as of 0236 GMT. The won stood at 1,074.8 against the dollar, up 0.04 percent versus Monday's close of 1,075.2. "Many expect a peace treaty to come out of the Trump-Kim
summit, not necessarily today but through other meetings in
weeks to come, and its largely priced in," said Kim Doo-un, an
analyst at KB Investment & Securities. Kim was referring to recent upswings in the KOSPI as the
index has risen in seven of the past nine sessions. Going into the summit in Singapore, Trump said he felt "really great" and expected "tremendous success" to come out of
Tuesday's summit, which could push the U.S. and North Korea to
reach a peace treaty and provide the isolated regime a security
guarantee. "The peace on the Korean peninsula could deliver significant
benefits to both North and South Korea, including potentially a
re-rating for South Korean stocks," DBS said in a report, adding the summit meeting should help to remove a major tail risk for
the region's markets and economies. "However, it would be prudent to contain excessive optimism,
given the enormous gulf between the two Koreas and the costs of
reunification," DBS added. North Korea has remained on combat alert since the Korean
War ended in 1953 with a truce and not a peace treaty. South Korean stocks that can potentially benefit from
inter-Korea projects continued to climb. Hyundai Cement , which could benefit from
infrastructure projects for the North, jumped 6 percent, while
Seohee Construction surged 18 percent following
reports that the company could secure projects aimed at removing
landmines in the border areas. But the steam came out of some shares related to inter-Korea
projects that had rallied for weeks leading up to the summit,
including Hyundai Elevator , which fell 2 percent. Market heavyweights such as Samsung Electronics and SK Hyunix edged down 1 percent and 0.3 percent,
respectively. Offshore investors were on track to be net sellers for the
day, offloading 119 billion won ($110.73 million) of KOSPI
shares near mid-session. Declining issues outnumbered advancing ones 440 to 345. The spread on South Korea's 5-year credit default swap , the contract that offers investor protection
against default on debt - rose to 42/43 basis points on early
Tuesday, up slightly from a day earlier. June futures on three-year treasury bonds gained
0.06 points to 107.06. 0236 GMT Prev close Dollar/won 1,074.8 1,077.1 Yen/won 9.87478 9.7763 *KTB futures 107.96 107.90 KOSPI 2,468.51 2,470.15 * Front-month futures on three-year treasury bonds For a round up of market news, please see our daily Asia Morning
Call report ($1 = 1,074.7000 won) (Reporting by Cynthia Kim
Editing by Jacqueline Wong) 

LEAVE A REPLY

Please enter your comment!
Please enter your name here