South Korean markets that were initially shocked by U.S. President Donald Trump’s overnight cancellation of the June 12 summit with North Korean leader Kim Jong-un recovered as follow-up comments suggest brinkmanship was at play instead of a reversal in dialogue course.
Trump released a formal letter addressed to Kim to inform him the Singapore meeting was off, after Pyongyang strongly criticized senior members of Washington and threatened a no-show when they floated the so-called Libyan lesson.
"I was very much looking forward to being there with you. Sadly, based on the tremendous anger and open hostility displayed in your most recent statement, I feel it is inappropriate, at this time, to have the long-planned meeting," Trump said in the letter.
The “open hostility” appears to be referring to a fiery comment issued from a North Korean official, Choe Son-hui, who earlier on Thursday slammed U.S. Vice President Mike Pence as "ignorant" and “stupid” after he said North Korea could end up like Libya if it didn’t give up its nuclear weapons. Libya’s former leader Muammar Qaddafi gave up his nuclear program but was killed by NATO-backed rebels in 2011.
But Trump indicated that the meeting, which was scheduled for June 12 in Singapore, could still take place, calling it a “missed opportunity” and telling Kim that “someday, I look very much forward to meeting you.”
The mixed message pushed the Korean market to the sidelines to watch for further developments.
The main Kospi index that slipped below the 2,450 level closed 0.28 percent lower at 2,459.10 on Friday, with losers mostly led by stocks that had rallied in recent weeks on expectations for renewed ventures in North Korea.
Namkwang Engineering & Construction, a company working in Kaesong Industrial Complex, a joint industrial park located in North Korea, saw its shares plummet 18.4 percent on Friday. Other Kaesong companies also fell by double digits, including Good People 22.05 percent, In the F 17.81 percent, and J. Estina 12.58 percent.
The Korean won closed 1.00 up against the U.S. dollar at 1,078. The credit default swap premium for the five-year foreign exchange stabilization bond - an indicator of a country’s bankruptcy risk - rose 3 basis points to 47 basis points.
In its immediate response, Pyongyang said it was still willing to keep the Singapore meeting alive. "We remain unchanged in our goal and will do everything we can for peace and stability of the Korean Peninsula and humankind, and we, broad-minded and open all the time, have the willingness to offer the U.S. time and opportunity," said Vice Foreign Minister Kim Kye-gwan in a statement through the North’s mouthpiece Korean Central News Agency.
Washington also indicated the meeting could go on. U.S. Secretary of State Mike Pompeo, in a phone conversation with his South Korean counterpart, said the U.S. still has a “clear will” to pursue dialogue with the North.
By Sohn Il-seon and Kim Hyo-jin
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]