SEOUL, May 29 (Korea Bizwire) — South Korea’s state pension operator cut the number of listed firms in which it has a stake of 5 percent or more in the first quarter of the year in an apparent bid to boost its investment returns, a corporate tracker said Wednesday.
The National Pension Service (NPS) owned 5 percent or more of 281 listed companies as of May 21, down 3.4 percent, or 10 firms, from three months earlier, according to CEO Score.
The combined market value of the NPS stakes in those firms stood at 103.2 trillion won (US$87 billion), up 2 percent from end-December.
Market watchers attributed the slight drop to the pension operator’s efforts to diversify investments amid criticism over its negative return in 2018.
Early this month, the NPS’ decision-making body agreed to boost its investments in alternative assets, such as real estate and infrastructure.
A panel of 35 independent experts made a positive assessment of the state pension operator’s efforts to diversify its investments, the Ministry of Economy and Finance said.
The panel also welcomed the NPS’ introduction of the stewardship code, a set of principles or guidelines aimed at getting institutional investors to actively engage in corporate governance to better support shareholders.
Still, the independent panel in charge of evaluating the NPS said the state pension operator lacks expertise in decision-making processes and independence, according to the ministry.
Stung by plunging stock prices at home and abroad, the NPS, the largest institutional investor in South Korea, chalked up a return rate of minus 0.92 percent last year, the first negative yield in a decade.
According to CEO Score, the pension operator reduced its stakes in 96 listed firms in the January-March period, while increasing shareholdings of 95 businesses.
As of end-March, the NPS had the largest stake of 14.22 percent in investment firm Halla Holdings Corp., trailed by Hansol Chemical Co. with 14.08 percent and department store giant Shinsegae Co. with 14.02 percent.
The pension operator held a 9.9 percent interest in top-cap Samsung Electronics Co., a tad lower than 10 percent three months earlier.
The NPS currently has more than 600 trillion won under its management, making it one of the biggest pension operators in the world.