Top 10 stocks in NPS portfolio deliver total return of 12%

South Korea’s largest institutional investor National Pension Service (NPS) so far this year has proved to be a wiser shopper of shares on the Seoul bourse than foreign investors who often provide a cue for local retail investors.

According to data the Maeil Business Newspaper analyzed and compiled with market data provider FnGuide Monday, the 10 biggest stocks favored most by the NPS in the October - December period of 2016 delivered an average return of 12 percent so far this year, outperforming that of foreign investors that stood at 6.7 percent and a 6.8 percent gain in the Kospi over the same period.

In the fourth quarter last year, the country’s largest retirement fund cherry-picked stocks of IT bellwether such as Samsung Electronics Co. and SK Hynix Inc., financial heavyweights from Shinhan Financial Group and KB Financial Group to Hana Financial group, and chemical companies such as SK Innovation Co. and Lotte Chemical Co.

Among them, Hana Financial, in which the NPS increased its shareholding from 8.8 percent in late September to 9.72 percent late last year, delivered the highest return of 28.3 percent in the period between the first trading session of this year and March 17. The runner-up was Hyundai Heavy Industries Co. whose stakes held by the NPS rose from 7.06 percent to 8.07 percent in the fourth quarter last year. The company’s share price jumped 22 percent so far this year.

KB Financial Group whose stakes owned by the NPS increased from 9.53 percent to 9.85 percent in the previous quarter, also saw its share price rise 21.3 percent. LG Display Co. saw its share price drop 11 percent, becoming the only losing stock out of the NPS top 10 picks.

Foreign investors, on the other hand, received poor scorecard on their investment in the fourth quarter of 2016 with top 10 picks delivering a 6.7 percent return on average, even lower than the Kospi which stood at 6.8 percent. Although overseas investors included financial groups’ stocks in their portfolio like the NPS, they missed out on tech and chemical firms and instead net purchased over 300 billion ($267.8 million) in cosmetics firms such as AmorePacific Corp., Amore G and LG Household & Healthcare Co. that have been hit hard by China’s recent retaliatory measures against Korea over the deployment of the U.S. Terminal High Altitude Area Defense (THAAD) system. AmorePacific, in particular, saw its share price drop 12 percent.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]