Tiny Japan shipping shares jump on North Korea detente hopes
15/06/2018 08:01
By Yoshiyuki Osada
TOKYO, June 15 (Reuters) - Shares of small Japanese shippers
jumped this week after the historic summit between U.S.
President Donald Trump and North Korean leader Kim Jong Un
sparked hopes of news business ties with the reclusive country.
Japanese retail investors are snatching up shares of the
firms that may benefit from a potential thaw between Tokyo and
Pyongyang, even though the Japanese government has been a
staunch supporter of "maximum pressure" on North Korea.
Shares of Rinko Corp 9355.T , a marine transportation
company, jumped 17 percent this week with the heaviest trading
volume in more than two years.
The firm is based in the port city of Niigata, a major hub
for trade with the areas surrounding the Sea of Japan, such as
Russian Far East and the Korean Peninsula.
Niigata was once served by Mangyongbong, a North Korean
cargo-passenger ship that connected the Japanese port and Wonsan
in North Korea. It was one of a very few connections between the
two countries before Japan banned the ship in 2006, when it
imposed sanctions following Pyongyang's missile and nuclear
tests.
Shares of some other companies with perceived geographical
advantages have also soared.
Fushiki Kairiku Unso 9361.T rose 38 percent, its biggest
weekly gain in almost two decades. The transportation firm is
based in Toyama prefecture, which also faces the Sea of Japan,
and has business ties with Russia.
Its trading volume this week exceeded 100,000 shares, larger
than its trading volume for the whole of last year.
Similarly, Hyoki Kaiun 9362.T , which operates cargo
shipping services to countries including Russia and South Korea,
jumped 24 percent in massive trading volume.
But market participants said the gains were driven purely by
retail investor speculation.
"Because there aren't many sellers, just a small number of
bids could lift prices," said Masayuki Otani, Chief Market
Analyst at Securities Japan, Inc.
"Retail speculators seem to be trying to make quick money -
They have great imagination."
Tomoichiro Kubota, senior market analyst at Matsui
Securities, said there was no clarity on whether sanctions
against North Korea would be lifted, let alone what impact such
a development would have on these companies' earnings.
Indeed, U.S. Secretary of State Mike Pompeo said on Friday
tough sanctions will remain on North Korea until its complete
denuclearisation. urn:newsml:reuters.com:*:nL4N1TG1OE
Japan is eyeing a meeting between Prime Minister Shinzo Abe
and North Korean leader Kim Jong Un following the Singapore
summit between North Korea and the United States. urn:newsml:reuters.com:*:nL4N1TG29Q
The issue of Japanese abducted by Pyongyang has been a major
stumbling block in any rapprochement. The two countries still do
not have diplomatic relations.
(Reporting by Yoshiyuki Osada; Writing by Hideyuki Sano;
Editing by Sam Holmes)
((hideyuki.sano@thomsonreuters.com; +81 3 6441 1827; Reuters
Messaging: hideyuki.sano.thomsonreuters.com@reuters.net))