North Korea Is a Bright Spot for Billionaire Who Forecasts Crash
Comment of the Day

May 01 2018

Commentary by Eoin Treacy

North Korea Is a Bright Spot for Billionaire Who Forecasts Crash

This article by Tamim Elyan and Manus Cranny for Bloomberg may be of interest to subscribers. Here is a section:

President Donald Trump is aiding Sawiris in one way, though: If a North Korean peace deal can be reached, the Egyptian’s investments there may finally pay off. After 10 years of waiting to repatriate all his profits easily and control his mobile-phone company, Egypt’s second-richest man says an accord would let him reap some of his returns.

​“I am taking all the hits, I am being paid in a currency that doesn’t get exchanged very easily, I have put a lot of money and built a hotel and did a lot of good stuff there,” said Sawiris, who founded North Korea’s first telecom operator, Koryolink. The North Korean unit’s costs and revenues aren’t currently recognized on the financial statements of Sawiris’ Orascom Telecom Media & Technology Holding SAE.

Sawiris over the years has been pressured by “every single Western government in the world” for his presence in the country hit by international sanctions for its nuclear threats, he said, but he considered himself a “goodwill investor.” His advice for governments and to Trump ahead of his expected meeting with North Korean Leader Kim Jong Un: Don’t bully him, and promise prosperity in exchange for concessions on nuclear.

Eoin Treacy's view

Investing in North Korea is not for the faint hearted or indeed for those who wish to avoid state sponsored mischief making. However, with the prospect of improving relations between North Korea and the USA, investors will turn to thinking about how best to leverage that event in their portfolios.
Orascom Telecom Media & Technology Holding SAE is listed in Egypt and also maintains a listing on the London International Exchange. The share is currently testing the upper side of a 30-month base formation and a sustained move above EGP0.90 would be required to confirm a return to demand dominance. 
Hyundai Asan Corp is perhaps the clearest pureplay on improving relations with North Korea. The company has substantial developments in the Gaesung joint industrial area. The share broke out of its base in March and a sustained move below KRW40,000 would be required to question potential for additional upside.

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