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DATE=6/15/2000
TYPE=CORRESPONDENT REPORT
TITLE=KOREA / MARKET REACT(L)
NUMBER=2-263507
BYLINE=ALISHA RYU
DATELINE=HONG KONG
CONTENT=
VOICED AT:
INTRO:  South Korea's stock market, the Kospi, plunged 
on Thursday, losing almost 6 percent of its value.  
VOA's Alisha Ryu reports investors were apparently 
disappointed that the reconciliation agreement between 
North Korean leader Kim Jong-Il and South Korean 
President Kim Dae-Jung failed to include any financial 
issues.   
TEXT:  The Kospi Index shed five-point-nine percent of 
its market value, closing at one of the lowest levels 
in recent weeks.  
Analysts say the sharp drop was mostly due to 
investors' seeking to profit from a market that had 
substantially increased in value in the days before 
Tuesday's first-ever summit between the Koreas.
Stock analyst Peter Kim (at S-G Asia) in Seoul says 
investors had been pouring money into shares of 
companies that could benefit from trade and commerce 
with a more open North Korea.  He notes investors 
especially favored companies that have the capability 
to help repair North Korea's crumbling infrastructure.
            /// FIRST KIM ACT ///
      Heavy industries, construction for example, did 
      benefit from the run-up leading to the summit.  
      There was a lot of anticipation of some major 
      step forward in the relations, even perhaps 
      leading to some economic gains.
            /// END ACT ///
But when the leaders issued a joint communique on 
cooperation Wednesday night, it failed to mention 
specific financial deals between the two countries. 
Mr. Kim says disappointed investors decided to sell 
the shares rather than take what could be long-term 
risks.
            /// SECOND KIM ACT ///
      We have always felt that North Korea had to be a 
      very, very long-term project.  I think everybody 
      recognizes that these types of companies will 
      have to wait a long time before they can benefit 
      from North Korea.
            /// END ACT ///
Mr. Kim says most companies that want to do business 
in the North face poor financial prospects in the 
short-term.  They say the North's inadequate 
infrastructure makes transportation expenses high and 
delivery slow. (Signed)   
NEB/HK/AR/JO/KL 
15-Jun-2000 07:28 AM EDT (15-Jun-2000 1128 UTC)
NNNN
Source: Voice of America
.