The KOSPI net buying rally by pension funds, including the National Pension Service, has recently come to an end. Since the end of last year, pension funds had been net buying KOSPI securities but recorded net selling for three of the last five trading days in the securities market last week.
According to the Korea Exchange on the 16th, 'pension funds and others' continuously net bought KOSPI securities for 42 trading days from Dec. 27 of last year until the 5th of this month, but recorded a net sell of 500 million won on the 6th. After that, the pension funds recorded net selling of 20 to 40 billion won for three consecutive trading days from the 11th to the 13th.
The net buying amount by pension funds during the record-long 42 trading days was 3.546 trillion won, averaging 84.4 billion won per day. Previously, the longest net buying record by pension funds was 32 trading days from Nov. 10, 2011, during which the total amount was 2.2023 trillion won, averaging 68.8 billion won per day; this period saw a significantly larger net buying amount.
Interest is rising over whether the buying momentum of pension funds will continue again. Opinions in the securities sector are divided.
Lee Kyung-min, a researcher at DAISHIN SECURITIES, noted, 'The buying trend of pension funds remains valid,' and added, 'While there is still significant room for increased allocation in domestic stocks, I believe net buying of over 10 trillion won is possible in the first half of this year.'
On the other hand, Kim Joong-won, a researcher at Hyundai Motor Securities, said, 'Domestic stocks have recorded higher revenue than other assets of pension funds this year, so I expect the adjustment of the Tactical Asset Allocation (TAA) limits to be completed soon,' mentioning the possibility of a reduction in the influence of pension funds.
Kim added, 'When the adjustment of the TAA limits is completed and short selling in the domestic stock market is fully resumed at the end of this month, the influence of foreign investors will expand.'
Meanwhile, according to the Korea Exchange, the revenue of the top 20 net bought stocks during the period of continuous net buying by pension funds in KOSPI was 12.84%, significantly exceeding the KOSPI increase rate of 5.29%. However, this revenue is lower compared to the overall institutional investors, including pension funds (22.61%) and foreign investors (28.63%).
In the securities sector, advice has been given that, due to the characteristics of pension fund money focusing on low-point buying, it is necessary to approach the sectors and stocks purchased by pension funds in an 'inverse manner.'
Kang Jin-hyuk, a researcher at Shinhan Investment Corp., analyzed, 'The National Pension Service and other pension funds focus more on low-point buying than trend following,' stating, 'The significance of pension fund supply and demand lies in estimating and confirming the market bottom rather than how much more it will rise.'