You Can Invest In The Reunification Of The Koreas

April 5, 2016 in Daily Bulletin

Certain that the North Korean regime will collapse? Think it’s inevitable that this will lead to a reunification of North and South Korea? The Economist took a look at how you could turn your confidence into cash:

  • South Korean asset managers have launched unification funds that make investments in companies that are expected to do well if the Koreas re-unify.
  • They invest in things like short haul flight operators that would be expected to get a big boost if they could suddenly fly freely across the Koreas.
  • Electronic rice cookers are also expected to be in demand by newly capitalist North Koreans.
  • Flows into and out of the funds seem to be a good barometer of how likely reunification is. With tensions climbing in recent times 10 billion won (US$8.6 million) have moved out of unification funds.
  • One problem might be that it’s just about possible to justify that any industry would do well under a unified Korea, making the funds somewhat meaningless.

Read more about how the funds have been doing under a Korea that remains divided, and other details here.

Source: The Economist