NPS increases investment in material, secondary battery and bio stocks

National Pension Service (NPS) headquarters located in Jeonju, North Jeolla Province / Courtesy of NPS

By Anna J. Park

The National Pension Service (NPS) continued to net purchase tech-heavy Kosdaq shares following its decision early this month to increase the maximum proportion of local stocks in its asset portfolio.

This month, the country's largest institutional investor has continued to net purchase Kosdaq stocks, with the exception of a few trading sessions. During the first two weeks of this month, the NPS net purchased over 163 billion won ($145 million) worth of Kosdaq-listed shares. When the period is expanded to the past month, the NPS net-purchased over 228 billion won worth of Kosdaq shares. That is the highest amount purchased among all institutional investors during the period.

The move is even more noteworthy considering that the NPS became a net seller of stocks listed on the benchmark KOSPI. From March 22 to April 20, the state-run pension operator net sold over three trillion won worth of large-cap local blue-chip companies, including Samsung Electronics, SK hynix, LG Chem, Kakao and Naver.

Turning away from the benchmark KOSPI, the nation's largest institutional investor, which operates over 835 trillion won ($740 billion), turned its eyes to smaller Kosdaq companies, strong home-grown businesses manufacturing essential semiconductor parts and materials and rechargeable batteries.

The public pension operator's top pick among Kosdaq shares is L&F, a Korea-headquartered electronic materials provider for lithium ion batteries. The NPS net purchased 35.1 billion won worth of L&F shares from the start of this month through to Tuesday this week.

Biopharmaceutical firm Celltrion Healthcare, electric vehicle (EV) cathode materials firm EcoPro BM and semiconductor materials provider Soulbrain are included in the NPS' top 10 picks among Kosdaq companies. Other businesses focusing on manufacturing key chip materials, such as WONIK IPS and PSK, are also included in the top 10 net-purchasing list.

Pharmaceutical and bio sector stars, such as Green Cross Labcell (GC Labcell), Oscotec, LegoChem Biosciences and Hugel, are also included in NPS' top 10 choices among Kosdaq companies.

Market experts view that the NPS' focus on Kosdaq companies was partially attributed to its recent change in strategic asset allocation goals, allowing more local stocks to be positioned. The move is also seen as a bid to maximize profits by investing in smaller yet stable companies ahead of the reintroduction of short-selling early next month. As short-selling in May will be allowed only partially among some of the large-cap companies, the NPS is focusing on under-valued smaller cap companies.