Korean pension funds buy a net $1.2 bn in Kospi stocks in November

South Korean pension funds continued their Kospi market buying spree for a fourth straight month in November, notching their largest net purchases on the main bourse for a single month this year, according to the Korea Exchange.  

The funds, led by the National Pension Service, have bought a net 1.8 trillion won ($1.2 billion) in Kospi-listed shares from Nov. 1 to Nov. 26, the bourse operator said on Tuesday.

They scooped up leading exporters such as semiconductor, automobile and battery companies weighed by sliding profits, amid global uncertainties over Donald Trump's new policies in his second term.

They hunted for bargains after the Kospi index tumbled to the 0.85 multiple of the average book value of its listed companies, down 5% year-to-date. The Kospi is the worst performer among major Asian stock markets this year.

The series of recently announced, share price-boosting measures, including Samsung Electronics’ 10-trillion-won buyback, have boosted investor confidence.

Samsung Electronics Co., the largest stock on the Kospi, has plunged nearly 30% this year, falling below the psychologically important 50,000-won barrier on Nov. 14 before rebounding above that level.

Korean pension funds turned to net buyers of Kospi stocks in August after unloading a net 825.1 billion won in July, when the Kospi climbed to its highest levels this year.

By comparison, individual investors purchased a net 2.0 trillion won in Kospi-listed stocks this month. But excluding their investments in exchange traded funds, their net purchases on the Kospi amounted to 274.5 billion won, according to the Korea Exchange.

The Kospi 200 index, which tracks the most-traded stocks with large market capitalizations, stood at 8.92 times its forward price-to-earnings ratio as of Nov. 26.

This month, the South Korean won currency weakened above the 1,400 won level against the US dollar, hitting a two-year low. The dollar/won rate is now trading slightly below the ceiling.

Pension funds were selective about chasing rechargeable battery stocks amid a slowdown in electric vehicle (EV) demand.

LG Energy Solution Ltd., however, was high on the list of their net purchases on expectations that the supplier to Tesla Inc. would be less vulnerable to the likely cuts in EV tax credits pledged by Donald Trump during his presidential campaign.

Meanwhile, the yield on Korea’s benchmark three-year treasuries fell to its lowest point in nearly three years, hitting 2.773% on Tuesday.

Write to Tae-Ung Bae at Btu104@hankyung.com
 

Yeonhee Kim edited this article.