Key Takeaways
- • Korean pension funds net bought more than 1 trillion won of domestic equities over two sessions, including 1.628 trillion won across the 30th of last month and the following day, stabilizing the KOSPI after a sharp U.S. technology selloff.
- • The KOSPI closed at 5,859.08 on the 2nd, up 2.24%, after the Philadelphia Semiconductor Index plunged 7.2% on the prior U.S. session following Intel's weak fourth-quarter guidance.
- • Pension buying lifted mid-to-long-term industrial names including Hyosung Heavy Industries (+13.32%), LS Electric (+7.35%), HD Hyundai Electric (+5.18%) and Hanwha Ocean (+9.6%), alongside semiconductors.
- • Pension funds recorded a net purchase of 805.9 billion won for the month, their second monthly net buying advantage this year after July (995.4 billion won).
Summary
South Korea's National Pension Service-style pension funds, described by Maeil Business Newspaper (Moon Ga-young) as the "big-handed" investor in the local market, became the principal source of support for the KOSPI on the 2nd after a sharp decline in U.S. technology stocks. Pension funds net bought mainly large semiconductor stocks on the prior session, reversing an opening decline and supporting mid-to-long-term export-linked names tied to electricity and shipbuilding.
The KOSPI closed at 5,859.08 on the 2nd, up 2.24% from the previous session. Samsung Electronics rose 1.78% to 229,000 won, while SK Hynix gained 3.81% to 1.472 million won. The session began weakly after Intel's fourth-quarter earnings guidance fell below market expectations, sending its shares down 28.58% on the 30th of last month. AMD fell 10.88%, Micron dropped 5.30%, and the SK Hynix ADR declined 7.95%, while the Philadelphia Semiconductor Index lost 7.2%.
Pension buying reversed that sentiment and supported a broad rebound. Hyosung Heavy Industries rose 13.32%, LS Electric gained 7.35%, and HD Hyundai Electric added 5.18%. Hanwha Ocean jumped 9.6% after announcing it had developed its own "Water Ram-type horizontal launch device," a core submarine component. Large-cap low price-to-book names Hyundai Steel (+11.62%), Lotte Shopping (+9.28%) and E-Mart (+7.09%) also advanced on expectations of corporate value-enhancement efforts.
According to the report, pension funds had been net sellers and held back after reaching their target domestic equity allocation earlier in the year. They bought 892.9 billion won of KOSPI stocks on the 30th of last month and another 169.9 billion won on the following session, a combined 1.628 trillion won that the report notes exceeded the amount bought in July. The month's net purchase of 805.9 billion won marked the second monthly net buying advantage this year, following July's 995.4 billion won.
The KOSPI closed at 5,859.08 on the 2nd, up 2.24% from the previous session. Samsung Electronics rose 1.78% to 229,000 won, while SK Hynix gained 3.81% to 1.472 million won. The session began weakly after Intel's fourth-quarter earnings guidance fell below market expectations, sending its shares down 28.58% on the 30th of last month. AMD fell 10.88%, Micron dropped 5.30%, and the SK Hynix ADR declined 7.95%, while the Philadelphia Semiconductor Index lost 7.2%.
Pension buying reversed that sentiment and supported a broad rebound. Hyosung Heavy Industries rose 13.32%, LS Electric gained 7.35%, and HD Hyundai Electric added 5.18%. Hanwha Ocean jumped 9.6% after announcing it had developed its own "Water Ram-type horizontal launch device," a core submarine component. Large-cap low price-to-book names Hyundai Steel (+11.62%), Lotte Shopping (+9.28%) and E-Mart (+7.09%) also advanced on expectations of corporate value-enhancement efforts.
According to the report, pension funds had been net sellers and held back after reaching their target domestic equity allocation earlier in the year. They bought 892.9 billion won of KOSPI stocks on the 30th of last month and another 169.9 billion won on the following session, a combined 1.628 trillion won that the report notes exceeded the amount bought in July. The month's net purchase of 805.9 billion won marked the second monthly net buying advantage this year, following July's 995.4 billion won.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.