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State pension fund expands buy of petrochemicals stocks on oil price rise

All News 10:36 January 11, 2017

SEOUL, Jan. 11 (Yonhap) -- South Korea's state pension fund increased its investment into petrochemical and bank stocks, while trimming its exposure to bio and pharmaceutical stocks, a market tracker said Wednesday.

The National Pension Service (NPS), the country's leading institutional investor, held stakes of 5 percent or more in a total of 285 listed firms here at the end of last year. Of the tallied firms, the NPS increased its stakes in 96 firms, 10 of which were petrochemical stocks such as Kumho Petrochemical Co., according to FnGuide.

The NPS is believed to have jacked up its exposure to those firms on expectations that a rise in oil prices would boost their earnings.

Foods and banks were among stocks favored by the NPS. The pension fund increased its stakes in nine food firms like Shinsegae Food Inc., and also jacked up its buying into banks such as Woori Bank, the tracker said.

In contrast, the NPS sharply trimmed its exposure to pharmaceutical and bio stocks amid concerns over their overblown earnings forecast.

The NPS cut stakes in Hanmi Pharmaceutical and six others. In particular, the NPS sold off its entire stake in LG Life & Science which was merged with LG Chem Ltd.

Meanwhile, the NPS increased its stake in top-cap Samsung Electronics Co. to 9.03 percent at the end of last year, up from 8.13 percent at the end of March. The NPS stakes in Samsung C&T Corp., Samsung SDI Co. and Samsung Securities Co. remained unchanged through last year, according to the tracker.

State pension fund expands buy of petrochemicals stocks on oil price rise - 1

As of last October, the NPS' asset base stood at 546 trillion won (US$455.2 billion) and is expected to reach 1,000 trillion won in about five years. The Korean pension fund is the world's No. 3 state fund following Japan's Government Pension Investment Fund with an asset of 1,300 trillion won and Norway's Government Pension Fund Global with about 1,000 trillion won.


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