Despite heavy selling, Korean pensions lose money from H1 stock investment

South Korean pension funds hardly can be relied as buffers for the Korean stock market routs as they too have lost big from this year’s downward spiral.

Korean public fund operators, including the country’s largest institutional investor National Pension Service (NPS), have net bought 432.9 billion won ($336.8 million) in the Kospi market and 116.8 billion won in the Kosdaq market so far this year, according to stock market operator Korea Exchange on Monday.

Their top buy for the first half of this year has been LG Energy Solution. They purchased 4.2 trillion won worth in the stock at 465,945 won apiece on average. Shares as of Tuesday midday were at 408,500 won.

Shares of LG Chem, the second most purchased Korean stock by the local pension funds, lost 5 percent over the same period. Their third and fourth favorites Kakao Pay and Kakao Bank are doing even worse, logging negative returns of 45 percent and 19 percent, respectively.

The institutional investors are also seeing negative returns from SK Innovation (-12 percent), Pan Ocean (-10 percent), Amorepacific (-19 percent), F&F (-32 percent), and SD Biosensor (-23 percent).

They fared better in secondary battery and shipbuilding stock investments.

Pension funds operators have purchased shares of cathode materials supplier L&F at average 21,890 won apiece to generate about 13 percent returns.

Shipbuilders have been a satisfaction.

Pension funds bought Hyundai Mipo Dockyard at average 80,782 won apiece and Hyundai Heavy Industries at 117,868 won. Their stock prices were trading at 87,000 won and 137,500 won each on Tuesday morning.

Others that have delivered profits were OCI, Korea Aerospace Industries, and Korea Electric Power Corp.

Local pension funds are expected to remain wary of the local market.

NPS is set to reduce local stocks’ allocation in its investment portfolio to 16.3 percent this year and 15.9 percent next year. Its share of local stocks in its portfolio is already 16.9 percent in March.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]