South Korea’s biggest institutional investor National Pension Service (NPS) shaved its holdings in shipbuilding and chemical companies while upping its stakes in the retail and fashion sectors in September as the country is gradually readying to live with Covid-19.

According to NPS’s equity ownership report released on Monday, the world’s third largest pension fund with $600 billion in asset loaded up on retail, apparel and auto parts stocks that are expected to benefit from the so-called “living with Covid-19” strategy.

NPS upped its stake in the country’s largest hypermarket chain Emart Inc., purchasing 12,971 shares at an average of 170,439 won ($143.61) apiece to raise its holdings from 9.63 percent to 10.03 percent.

“Emart’s discount store division will return to a normal business cycle starting October, and its online platform SSG.com is readying to go public next year, boding well for the retail chain’s future value,” said an analyst at Yuanta Securities Korea.

Brokerages are also raising earnings forecasts. According to Seoul-based financial market data and solution provider FnGuide, Emart’s operating profit in the third quarter will jump more than 15 percent on year to 174.7 billion won with sales climbing over 10 percent on year to 6.51 trillion won.

Emart shares are trading down 1.58 percent at 156,000 won in morning trading on Tuesday.

NPS scooped up shares of apparels manufacturer Hansae Co., original development manufacturer (ODM) that serves many global clothing labels including Target, Gap, and H&M, raising its stake in the company to 10.37 percent from 9.99 percent. NPS currently holds about 4.15 million shares in Hansae, the ownership status report showed.

Hansae stock has jumped about 11 percent in September on the back of growing orders from major clients and lifting of shutdown in Vietnam as of end-September where Hansae manufactures 60 percent of its total production, explained an analyst at Shinyoung Securities. Its shares are trading 0.22 percent higher at 22,700 won in Seoul.

NPS also upped its stake in the country’s second largest auto parts maker Mando Corp. from 8.82 percent to 10.03 percent. The auto parts maker has spun off its autonomous driving business into a standalone unit last month.

Meanwhile, NPS pared its holdings in chemical and shipbuilding companies. Shares in Hyosung Chemical Corp., whose stock price shot up about 124 percent in the nine months of this year, fell by 0.17 percentage points.

The fund’s stake in Hyundai Mipo Dockyard Co. was lowered to 9.78 percent from 11.31 percent. Its shares tanked nearly 7 percent last month after it delivered an operating loss of 192.1 billion won in the second quarter owing to the rising raw material prices.

NPS also shaved its holdings in CS Wind Corp., the world’s top supplier of wind towers, by 0.39 percentage points as the company is subject to operation restrictions in Vietnam and Malaysia, its major production base, since June due to flare-up of Covid-19.

By Kim Jung-beom and Lee Soo-min

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