North Korea just announced they will be dismantling nuclear sites and seem to show signs of cooperation with plans to denuclearize. There are also rumors about talks about a peace treaty between the two Koreas. It seems the economic sanctions are showing to be fruitful especially after China began putting the pressure on the North by slowly reducing its trade for the past 4 years. It seems, this time it may be different and may open some interesting investment opportunities.
North Korea lacks the basic things like those of many emerging markets such as the following:
- Infrastructure
- 4G Coverage
- Energy
The question is, whom will North Korean’s side with to begin the modernization of their country, China or South Korea. I’m assuming they will open to both but I believe there is an unspoken desire amongst the two Koreas to work together than with its northern neighbor China.
My position for infrastructure is Hyundai Engineering and Construction Co., LTD. (000720.KS). A conglomerate with strong presence in Korea and globally. SK Telecom Co (SKM), one of the largest telecommunications operator in the south and KEPCO Engineering and construction (052690.KS) the largest electricity producer that is responsible for around 90% of Korea’s electricity. Relatively, best of breed choices that I believe even without the North Korea’s business the companies should be fine. Current charts seem to show investors are not yet anticipating these opportunities so it may still be early. This investments time horizon is more long term (2-4 years). I love to anticipate early and get in before the herd. Any of you guys have any other ideas? Love to hear from you guys! Exciting times!