Subscribe
E-Paper
 |
| Brand image of POSCO International / Korea Times file |
By Yi Whan-woo
The military suppression of pro-democracy protesters in Myanmar is adding to woes of investors in POSCO International, as the Southeast Asian country increasingly faces the likelihood of a protracted civil unrest.
This aggravated political situation, according to analysts, could gravely affect investment sentiment, in addition to alleged ties between the trading company's businesses in Myanmar and the military junta there, notably its highly profitable gas field project.
These allegations already created problems for POSCO, the world's fifth-largest steelmaker that owns POSCO International. POSCO has been contacting media to clarify allegations that are false or based on misunderstanding.
The stock price of POSCO International closed at 20,000 won ($17), Monday, showing little difference from previous days this month.
Speaking on condition of anonymity, an analyst, however, said that the political uncertainty in Myanmar "may loom large" in the stock market.
"This is not a case that can be singlehandedly controlled by POSCO International or POSCO, but by outside factors with unpredictable courses of change," he said. "Considering this, investors will have to embrace uncertainty as long as political instability in Myanmar persists. And they will not like that."
The analyst pointed out the market price of POSCO International went as high as 25,400 won in mid-February but has not reached that far since then.
Another analyst, who also asked for anonymity, remained cautious about the future of doing business in Myanmar and the impact on its share price.
"It's risky to assume the gas field and other businesses owned by POSCO International will be damaged if a civil war breaks out," he said.
He noted Myanmar Oil and Gas Enterprise, a state-run company, holds a 15 percent stake in the gas project off the coast of Shwe, located 500 kilometers from the Myanmarese capital of Naypyidaw, in a consortium of six international companies led by POSCO.
"I bet both the junta and whoever are against it are sensible enough to understand the Shwe project is valuable for their own country, not just Korea," he said.
He still viewed POSCO International may have to cut gas production if the Myanmar situation worsens and that it may work against investment sentiment.
POSCO International dismissed any negative prospect toward the company on the stock market.
"The Myanmar crisis has had little influence on the gas field in the first quarter," a company official said.
The Shwe gas field project posted sales of $623 million in 2020, accounting for 86 percent of POSCO International's total sales in Myanmar.
The gas field generated an operating profit of $276 million last year, accounting for 64 percent of the company's total operating profit in the country.
