Pension fund set to buy W10 trillion in stock

Korea’s state pension fund plans to invest nearly 10 trillion won ($8.8 billion) in large-cap Samsung Electronics and other domestic stocks this year, a senior official said Tuesday, sparking hopes that it could help boost the local stock market.

The planned investment would raise stock investments by the National Pension Service, the country’s leading institutional investor, to approximately 110 trillion won, or 20 percent of its total assets tallied at 545 trillion won as of last November.

“The amount of the fund rises by around 50 trillion won annually,” said Kang Myoun-wook, the fund operator’s chief investment officer, in an interview with Yonhap News Agency. “The National Pension Service plans to pump an estimated 10 trillion won into domestic stocks in order to retain its current portfolio of all investments.”

As of November, the pension fund’s exposure to domestic stocks came to 99 trillion won, or 18.2 percent of its total assets under management. The fund has been managing the portion of its stock exposure at around 20 percent.

Saving specifics have yet to be determined, Kang said the National Pension Service will soon come up with a detailed investment plan. “Money will be invested evenly in large caps as well as mid- and small-cap issues,” he said. “The National Pension Service will have to buy more of Samsung Electronics, given its high investment return last year.”

The fund posted a return of 5.6 percent from stock investment last year thanks largely to a jump in market bellwether Samsung Electronics, the world’s largest smartphone maker and flagship of Korea’s leading family-controlled conglomerate Samsung Group.

The National Pension Service had a 9.03 percent stake in the tech behemoth as of the end of December, up from 8.13 percent in the first quarter of last year. As of Jan. 10 this year, the state pension fund operator owned 5 percent or more of 285 companies.

YONHAP