South Korea's national pension fund saw the value of its domestic stock holdings surge by a record quarterly amount in the second quarter, as the Kospi broke the 9,000-point mark for the first time amid a broad bull market. Semiconductor heavyweights Samsung Electronics and SK hynix led the gains, accounting for roughly 80 percent of the total increase in assessed value.
According to FnGuide, a financial data provider, the combined assessed value of shares held by the National Pension Service — covering 270 listed companies in which it has disclosed stakes of 5 percent or more — reached 486.01 trillion won ($318 billion) as of Monday.
That represents an increase of 189.57 trillion won from 296.44 trillion won at the end of March, a 63.9 percent rise in just three months and the largest quarterly gain on record.
The second-quarter increase exceeded the first-quarter gain of 78.55 trillion won by more than 100 trillion won. The return rate also nearly doubled, climbing from 32.0 percent in the first quarter to 63.9 percent in the second quarter, both measured against the end of last year.
Semiconductor blue chips drove the surge. The combined increase in assessed value for Samsung Electronics and SK hynix totaled 151 trillion won, accounting for 79.8 percent of the overall gain.
Notably, SK hynix contributed more than Samsung Electronics this quarter.
The pension fund maintained its 7.50 percent stake in SK hynix unchanged from the first quarter, yet the assessed value of that holding jumped from 43.16 trillion won to 125.3 trillion won — an increase of 82.14 trillion won, or 190.3 percent.
For Samsung Electronics, the fund's stake edged up 0.09 percentage points to 7.84 percent, and the assessed value rose 69.16 trillion won, or 90.1 percent, from 76.68 trillion won to 145.85 trillion won.
As a result, the combined weight of Samsung Electronics and SK hynix within the pension fund's domestic equity portfolio expanded sharply, rising from 40.4 percent at the end of March to 55.7 percent as of Monday.
Among other top gainers by assessed value, SK Square ranked third with an increase of 12 trillion won. Samsung Electro-Mechanics posted a gain of 10.41 trillion won despite trimming its stake by 0.51 percentage points to 9.95 percent. Samsung C&T, Samsung Life and SK Group followed, with increases of 2.73 trillion won, 2.51 trillion won and 2.06 trillion won, respectively.
Some holdings lost value. Mirae Asset Securities posted the largest decline, with its assessed value falling 1.07 trillion won. LG Energy Solution (-573.7 billion won), Hanwha Systems (-451 billion won), Kakao (-447 billion won) and Naver (-415.3 billion won) also recorded valuation losses.
During the second quarter, the pension fund newly acquired stakes of 5 percent or more in 19 companies, including Simtech and SK Etertics, while it fell below the 5 percent threshold in 21 companies, including LX Semicon and Hana Tour.
The largest stake increases were in BH Co. (7.47 percent to 13.35 percent) and DL E&C (8.06 percent to 11.44 percent). The fund reduced its holdings in LG Group (9.19 percent to 6.42 percent), SK Chemicals (8.50 percent to 6.51 percent), Daejoo Electronic Materials (9.98 percent to 7.66 percent) and Vinatech (8.68 percent to 5.12 percent).
The total number of companies in which the pension fund holds stakes of 5 percent or more edged down to 270 from 274 at the end of March. Newly added holdings included 13 Kospi-listed and six Kosdaq-listed companies, while 11 Kospi and 10 Kosdaq companies were removed.
The number of companies in which the fund holds stakes of 10 percent or more also declined, from 34 to 32.
As of the end of March, the three largest stakes were in Samsung Securities (13.37 percent), OCI Holdings (13.37 percent) and Daeduck Electronics (13.12 percent). By Monday, the ranking had shifted to Hyundai Department Store (13.49 percent), Samsung Securities (13.35 percent), BH Co. (13.35 percent) and Korea Investment Holdings (13.28 percent).
Stakes were unchanged in 107 companies, including SK hynix. Including newly added holdings, the fund increased its stake in 97 companies and reduced it in 87.
Meanwhile, markets are closely watching the pace and scale of any selling by the pension fund after its domestic equity rebalancing freeze expired at the end of June.
A large increase in assessed value does not mean the pension fund will immediately realize gains of the same magnitude. The fund's standard practice is to spread sales over an extended period to minimize market disruption, and analysts say the actual impact on supply and demand will depend on the speed of rebalancing and the direction of the broader market.
rainbow@heraldcorp.com
