Back in September 2017, the war of words intensified between President Donald Trump and North Korea’s leader, Kim Jong-un.
Trump called Kim a “Rocket Man” bent on a “suicide mission”. Kim responded that Trump was a “mentally deranged US dotard,”and threatened to test an H-bomb over the Pacific.
Trump warned that the U.S. could “totally destroy” North Korea in his speech before the U.N.
Trump also signed an executive order that would hit North Korea with travel and economic sanctions in an effort to cut off money flow to the country. The order gave the Treasury Department the authority to suspend all U.S. account access to any foreign bank that conducts business tied to North Korea trade.
Seven months later, the war of words, North Korean nuclear missile tests, and a 65-year war with South Korea appear to have come to an end. In fact, North Korean’s leader reportedly told South Korean President, Moon Jae-in, that he would abandon nuclear ambitions if the U.S. agreed to formally end the Korean War and promise not to attack his country.
Granted, skeptics have warned that North Korea has made similar pledges of denuclearization on many occasions, with little to no intention of abiding by them.
According to The New York Times:
North Korea has so far offered no timeline for dismantling its nuclear weapons and facilities. Nor has it clarified how it defines a “nuclear-free Korean Peninsula,” and especially whether that means a withdrawal or significant reconfiguration of American troops based in South Korea, as it has demanded before.
You may remember North Korea committed in the 1990s to give up its nuclear program and destroyed a nuclear power cooling tower in 2008 as part of a similar promise.
Perhaps things have changed, though.
Just last week, Kim and Moon signed a joint declaration recognizing a nuclear-free Korea.
One good thing that’s come out of this so far is a rally in related Korean trades.
- The Korea Fund (KF) rallied from $40.26 to $42
- The iShares MSCI South Korea Capped ETF (EWY) ran from $73 to $76
- The Direxion Daily South Korea Bull 3x Shares (KORU) jumped from $52 to $60
Even related indices moved higher, including:
- The iShares MSCI Korea Index (WWK), which jumped from 73.50 to 76.20
- The South Korea Seoul Composite (KOSPI), which ran from 2440 to 2515
While the rallies have been noteworthy, we must also be aware that the North has made similar promises in the past, and we didn’t see much progress on those promises.
But there’s always hope, right?
Stay tuned to The Cheap Investor for further details.