Hyundai merchant tumbles as tensions escalate between two Koreas

[SEOUL] Hyundai Merchant Marine Co led shares of North Korea-related companies lower in Seoul trading after South Korea announced the withdrawal of its workers from an industrial complex jointly run with the North, escalating tensions between the two nations.

Hyundai Merchant fell as much as 20 per cent to 2,445 won. Apparel maker Shinwon Corp declined as much as 13 per cent and watchmaker Romanson Co dropped as much as 12 per cent. Underwear maker Good People Co plunged as much as 15 per cent.

In response to a recent nuclear test and rocket launch by the North, South Korea yesterday announced the withdrawal from the Gaeseong industrial complex, the last remaining symbol of economic cooperation between the two nations.

The move will impact more than 120 South Korean companies employing about 54,000 North Korean workers at the complex that sits just north of the heavily armed border.

Although Hyundai Merchant last month sold all its shares in Hyundai Asan Corp, a closely held unit that spearheads North Korea-related businesses for the parent Hyundai Group, the company is still seen as a proxy stock for North Korea, according to Park Moo Hyun, an analyst at Hana Daetoo Securities Co in Seoul.

Hyundai Merchant still participates in a project to import Russian bituminous coal through a railway connecting North Korea and Russia.

BLOOMBERG