The National Pension Service (NPS), a significant player in the domestic capital market, has been found to have invested most heavily in the IT and electronics sectors over the past year. (Image courtesy of Yonhap)
SEOUL, Jan. 18 (Korea Bizwire) — The National Pension Service (NPS), a significant player in the domestic capital market, has been found to have invested most heavily in the IT and electronics sectors over the past year.
While the number of companies where the NPS owns more than 5% of shares has decreased, there has been an increase in companies where it holds over 10%, signifying a focus on concentration in its domestic stock investments last year.
According to a study by corporate data research institute CEO Score on January 17, as of the end of last year, the NPS had investments in 281 companies with a stake of over 5%, down from 287 at the end of 2022. In contrast, the number of companies in which the NPS had a stake of over 10% rose from 36 in 2022 to 43 last year.
This trend indicates the NPS’s strategy of prioritizing stable performance and risk diversification by increasing investment in major companies, especially amidst the surge of the domestic stock market (KOSPI) from 2,236.40 at the end of 2022 to 2,655.28 by the end of the last year.
The sector where the NPS had the highest number of investments exceeding 5% was IT and electronics. From 37 companies (12.9%) at the end of 2022, the number increased to 41 companies (14.6%) last year.
Following IT and electronics were holding companies with 40 companies (14.2%), petrochemicals with 26 (9.3%), services with 24 (8.5%), and shipbuilding, machinery, and equipment with 23 (8.2%).
LS emerged as the stock where the NPS had the largest shareholding. The NPS’s stake in LS increased from 13.54% in 2022 to 13.85% last year. LIG Nex1 followed with an increase in stake of 0.84 percentage points to 13.53%.
The top five in shareholding included two cosmetics ODM (Original Design Manufacturing) companies: Cosmax (13.35% – third place) and Kolmar Korea (13.2% – fifth place).
The company where NPS increased its stake the most last year was Hyosung Heavy Industries, rising from 6.04% to 11.29%. The growth in new orders for ultra-high voltage transformers and power equipment, indicating improved performance expectations, likely drove the NPS’s investment.
The NPS’s stake in SoluM also increased significantly from 5% to 10.19%, spurred by the growth prospects in the electric vehicle charging business.
Among holding companies, CJ saw the most significant increase in stake from 7.84% to 12.94%.
However, the NPS’s stake in SK Rent-a-Car dropped sharply by 8.06 percentage points from 8.66% to 0.6%, possibly due to its impending inclusion as a subsidiary of SK Networks.
Doosan saw the most significant decrease among holding companies, with its stake dropping from 13.6% to 6.19%. This decline was attributed to the lowered corporate valuation of Doosan following the listing of its key subsidiary, Doosan Robotics, in October last year.
The investment in Samsung Electronics was the most valuable among the stocks where NPS had a stake over 5%. As of the end of last year, the NPS held a 7.35% stake in Samsung Electronics, valued at approximately 34.46 trillion won, accounting for about 25% of the total value of the NPS’s investments in stocks where it holds more than 5%.
SK Hynix, with a 7.9% stake, was second in terms of share value at 8.13 trillion won. Following were LG Energy Solution (5.74% – 5.57 trillion won), Samsung Biologics (6.72% – 3.63 trillion won), Naver (9.34% – 3.39 trillion won), Hyundai Motor (7.35% – 3.16 trillion won), and Kia (7.17% – 2.88 trillion won).
In 2022, the NPS was the largest shareholder in eight companies, including DGB Financial Group, KB Financial, KT, KT&G, Naver, Shinhan Group, Posco Holdings, and Hana Financial Group. However, this number decreased to seven last year, with KT&G being removed from the list.
Kevin Lee (kevinlee@koreabizwire.com)
