National Pension Service to expand Korean stock purchases

27-Mar-2021 Intellasia | KoreaTimes | 5:02 AM Print This Post

The National Pension Service (NPS) is in internal talks to rebalance its asset portfolio in ways to increase its possession of Korean stocks, amid criticism from retail investors that it has driven the benchmark KOSPI’s downward readjustment by engaging in a mass selling spree of local stocks.

Earlier, the portion of its Korean stock purchases could reach a range of 14.8 to 18.8 percent out of the pension fund’s total asset class. But the NPS will expand the ratio to a band of 13.3 to 20.3 percent.

This came in response to retail investors’ anger that the NPS should stop wielding massive influence in the local stock market by engaging in a months-long selling spree of local stocks worth trillions of won, which they argue has put the brakes on the KOSPI’s year-long rally.

The pension fund sold Korean stocks worth more than 15 trillion won ($13.27 billion) this year only amid the post-coronavirus super rally of the benchmark index, as it had to meet the earlier asset class portion.

The main bourse achieved unprecedented growth for the past year after bottoming out at the 1,400-point range. This has forced the NPS to join the recent selling spree of local stocks.

But the move by the fund still leaves to be much desired, as it is not proper for the organisation to manage its assets partly due to the negative sentiment from retail investors.

“The purpose of the NPS is to maximise profitability of its assets, so rebalancing its portfolio amid the negative public sentiment is not a step in the right direction,” an investment industry source said.


Category: Korea

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