Samsung Securities
Employees of Samsung Securities talk in front of its logo at the unit's headquarters in Seoul, Nov. 30, 2007. REUTERS/Jo Yong-Hak

Samsung Securities, the financial services arm of South Korea’s largest conglomerate, announced Thursday it was setting up a research team to study potential avenues of investment in North Korea, local media reported. As inter-Korea ties improve with the recent meetings between the leaders of the two neighbors, the company’s move is a first among South Korean brokerage firms.

The newly established research desk will “provide comprehensive and systematic analysis with longer-term perspectives, at a time when geographical circumstances regarding North Korea go beyond mere short-term market themes to a new growth momentum for local firms,” Yonhap news agency reported.

North Korea has been isolated economically due to a wide range of international sanctions for its pursuit of nuclear weapons. With the recent overtures by the country’s leader Kim Jong Un to the international community, most notably to South Korean President Moon Jae-in — who he met twice in the last few weeks — and to President Donald Trump — a meeting between the two is scheduled to be held in Singapore soon — that may be set to change.

To better understand the working of companies in a communist economy, Samsung Securities will meet with strategic partners in China and Vietnam — CITIC Securities and Ho Chi Minh City Securities respectively. It will try to learn how the two countries opened up and liberalized their economies, and apply those learnings to North Korea, according to Pulse News.

According to its financial report for the first quarter of 2018, Samsung Securities was managing assets worth over 195 trillion won (over $182 billion).

South Korean businesses are currently banned in the North, along with consumer goods from across the southern border. However, the Galaxy range of smartphones from Samsung are quite popular in North Korea, according to defectors who have been interviewed.

“There are quite a number of North Koreans who are using Galaxy smartphones,” Yang Un-chul, vice president of Sejong Institute, a think tank in Seoul, told the Investor, a South Korean publication, on basis of interviews he conducted with North Korean defectors. “It is not about whether they can get their hands on the Samsung smartphones, but about if they can afford to buy.”

The high price tag on Samsung Galaxy smartphones in the North comes from the fact that they are available only on the black market. The regime’s restrictions are not as strict as they once used to be, and therefore, the smuggled devices are popular, because they allow users to communicate with friends and family outside the isolated country. Otherwise, the mobile devices sold in North Korea are imported from China and are designed to block or limit access to the internet. Samsung is also a preferred brand over Chinese smartphones because it supports a Korean language interface.

Samsung Securities is an independently traded company on the South Korean stock exchange, and based on Thursday’s closing price, has a market capitalization of 3.32 trillion won (about $3.1 billion). Shares of Samsung Securities closed 2.42 percent higher Thursday, beating the broader Kospi index which rose 0.69 percent.