NPS raises stakes in Hyundai, Samsung and SK

South Korea’s state pension fund, which holds stakes in more than 250 local listed firms, announced changes to its investment portfolio on Friday that are having a considerable impact on the local markets.

Among the major conglomerate subsidiaries in which it has invested, the National Pension Service increased its stake in the nation’s No. 1 auto manufacturer, Hyundai Motor, by 1 percent to 10.05 percent by acquiring additional shares Sept. 9. The NPS’ stake in Hyundai Motor stood at 9.05 percent as of April 3. 

The pension fund’s stake in Hyundai Mobis, the auto parts unit under Hyundai Motor Group, increased from 10.03 percent to 11.03 percent as of Aug. 29.

Among other conglomerate subsidiaries that the NPS acquired an additional 1 percent stake in were Samsung’s construction unit Samsung C&T, SK’s energy unit SK Innovation and E-Mart, the country’s largest discount store chain, operated by Shinsegae. Its stake in Samsung C&T, SK Innovation and E-Mart respectively increased to 6.96 percent, 10.63 percent and 11.4 percent as of last month.

The NPS also purchased additional shares in Celltrion and now retains a 7.1 percent stake in the biopharmaceutical firm. It also purchased a 5.01 percent stake in the nation’s third-largest food company, Ottogi, a new addition to its portfolio.

Of the K-pop agencies in its portfolio, the NPS reduced its stake in YG Entertainment, whose stocks have lost value after a series of sex, drug and bribery scandals involving its former head and artists. Its stake in the entertainment agency fell nearly 1 percent to 5.54 percent from 6.68 percent.

But it increased its stake in SM Entertainment, YG’s industry rival, from 9.24 percent to 10.44 percent as of Aug. 1.

The NPS’ announcements come as the NPS is seeking to actively exercise its rights based on the stewardship code, which is a set of guidelines on trustee responsibility that allows the fund operator to intervene in corporate management. It intends to ensure better governance and higher shareholder returns in the companies, but there have been concerns the government may be attempting to abuse such guidelines.

The NPS currently holds about 700 trillion won ($582.6 billion) in assets.

By Jung Min-kyung (mkjung@heraldcorp.com)