The assassination of North Korean leader Kim Jong-un’s half-brother, Kim Jong-nam, is likely to have a minimal impact on the South Korean stock market.

Lee Kyung-min, a researcher working for Daishin Securities, said to local media, “Kim Jong-un’s aggressive action may shrink the investor’s confidence, but the effect will be limited, since Kim Jong-nam did not have a specific role in the relationship among the two Koreas and China.”

Although investor confidence may drop due to potential domestic upheavals that could take place within North Korean society, unlike previous provocations by Kim Jong-un aimed at the outside world, its substantive effect will still be narrow.

Kim Jung-sik, professor of economics at Yonsei University, said, “The impact that the incident will have on the stock market is quite questionable.” He added, “If the situations within North Korea worsen, it will become an issue that cannot be ignored. However, if it settles as a single-shot event, many predict that other issues such as the possible increase in the US federal funds rate in March will have a larger impact on the market.”

Meanwhile, the news of the assassination brought noticeable changes to the defense industry.

Stocks of Victek rose by 1.35 percent while the Kosdaq market closed with a 0.72 percent increase overall. The benchmark Kospi also showed an increase of 0.45 percent, and its defense-related stocks increased by a greater margin: Hanwha Techwin by 1.83 percent, Korea Aerospace Industries by 1.25 percent and Poongsan by 0.97 percent.

By Yim Ji-min (jiminy@heraldcorp.com)