20171129-三星证券-North_Korea_missile_launch__Response_restrained_to_latest_provocation_4页_555kb

Samsung Strategy Spot Summary

Core Content

This document is a strategic analysis report by Samsung Securities, focusing on North Korea's recent missile test and its implications for regional and global security, as well as the potential impact on financial markets and investment strategies.

Key Events and Details

• Missile Launch: North Korea launched a new long-range missile (Hwasong-15) on November 29, 2017, from Pyeongsong, 30km north of Pyongyang.
• Range and Capabilities: The missile flew approximately 950km and reached an altitude of 4,500km, landing within Japan's exclusive economic zone.
• Classification Dispute: The missile was classified as an ICBM by South Korea, the US, and Japan, but the US designated it as an IRBM.
• Nuclear Warhead Potential: Japanese officials claim the missile can carry multiple nuclear warheads, suggesting a significant advancement in North Korea's nuclear capabilities.
• South Korea's Response: South Korea's Joint Chiefs of Staff dismissed the possibility of multiple warheads.

Main Views and Analysis

• North Korea's Progress: The test demonstrates North Korea's advancement in ICBM technology, particularly in terms of range and potential nuclear payload.
• Strategic Implications: Despite the test, the report suggests that North Korea is still working on improving re-entry capabilities for its missiles, which are crucial for targeting the mainland US.
• Regional Responses:
  • United States: President Trump's subdued response indicates a preference for maintaining the current policy and applying economic sanctions over military action.
  • Japan: The Japanese government reacted more calmly than in previous instances, possibly due to political considerations.
• Market Stability: Financial markets remained calm, indicating that the market does not expect a major escalation in tensions.
• Future Outlook: The report suggests that North Korea may use its nuclear status as leverage to ease economic sanctions through negotiations, rather than continuing with more missile tests.

Investment Strategy Recommendations

• Focus on Fundamentals: The report advises investors to focus on fundamental aspects rather than overreacting to geopolitical risks.
• Low Probability of Extreme Events: It predicts that the likelihood of an extreme event on the Korean Peninsula is low, as neighboring countries, including the US, are showing a more strategic approach to resolving the nuclear issue.
• Market Resilience: Financial markets are unlikely to react strongly to scattered provocations from North Korea.

Additional Information

• KCNA Statement: North Korea's state news agency, KCNA, issued a significant statement confirming the successful launch of the Hwasong-15 and the completion of its state nuclear force.
• Kim Jong-un's Pride: The North Korean leader expressed pride in achieving this milestone, highlighting the strategic importance of the test.
• Uncertainty in Next Moves: The report emphasizes that it is unclear what North Korea's next steps will be, and any further actions should be closely monitored.

Disclaimer and Legal Information

• Not Investment Advice: This report is for informational purposes only and does not constitute investment advice.
• No Individual Tailoring: It does not consider individual client circumstances.
• Legal Restrictions: The report has different distribution restrictions depending on the region, including the US, UK, Korea, Singapore, and others.
• Analyst Certification: The views expressed are the personal opinions of the analysts and are not influenced by compensation or other external factors.
• No Liability: Samsung Securities disclaims any liability for losses or damages resulting from the use of the report.

Conclusion

The report highlights North Korea's continued advancements in missile technology and its strategic use of such capabilities to influence international relations and economic conditions. It suggests a cautious approach from neighboring countries and financial markets, emphasizing the importance of fundamentals in investment decisions.