NPS leads institutional selling, vexing retailers vainly defending Kospi

2022.01.26 10:42:34 | 2022.01.26 12:02:05

[Photo by Han Joo-hyung]이미지 확대

[Photo by Han Joo-hyung]

South Korean pension funds were behind the bulk of institutional selling of 171.4 billion won ($143 million) that dragged down the main Kospi 2.6 percent Tuesday to the lowest finish since Dec. 8, angering retailers who vainly have been defending the market versus heavy foreign and local institutional selloff.

Pension funds on Tuesday dumped 145.8 billion won worth Kospi holdings. They have kept up net sale position from the beginning of the year, pushing the total to 1.45 trillion won as of Tuesday.

They joined foreigners, unloading 620.8 billion won worth of shares from Jan. 19 to 25. Since institutional selling totaled 124.4 billion won stocks during the period, non-pension funds would have bought 496.4 billion won worth Korean stocks. The Kospi market lost 5.02 percent during the five-day period.

Pension funds traditionally act on behalf of government intervention to stabilize the market.

[Photo by MK DB]이미지 확대

[Photo by MK DB]

During a panicky rout at the onset of pandemic in March 2020, they had net-bought 3 trillion won worth in Korean shares.

They however synchronized with foreign institutions last year, selling a net 24.1 trillion won throughout the full year to the vexation of mom-and-pop investors.

The National Pension Service (NPS) is the country’s biggest institutional investor, accounting for the lion’s share in pension funds’ stock investment. Its local stock holding currently stands at 17.9 percent versus pre-set target of 16.3 percent.

Still, it has room to adjust the holdings in the range of plus or minus 3 points of the target.

Some suspect the NPS is building up ammunition to invest in LG Energy Solution which could become No. 2 when it debuts on Thursday.

By Pulse

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