South Korea's state-run pension fund has expanded its clout in the country's midcap shares last year, as it sought to buy undervalued but promising shares amid a lackluster performance of the local stock market, data showed Monday.

The National Pension Service, the operator of the National Pension Fund, said the number of companies in which it holds a 10 percent stake or more rose to 34 at the end of last year, compared with 18 logged at the end of third quarter.

Of the tallied firms, 22 companies were midcap shares, according to the NPS.

The NPS, the country's largest institutional investor, has been reluctant in boosting its stake beyond 10 percent in a company as it was required to disclose its transactions if its stake in a certain share surpassed the threshold.

Such disclosure requirements were relaxed in August last year.

The NPS is required to submit filings for transactions above the 10 percent level once a quarter, also sharply eased from within five days of transaction, which reduces the chance of NPS' investment strategy being revealed to investors.

Market watchers said eased disclosure rules likely encouraged the NPS to increase their presence in some midcap shares.

By share, the NPS' stake in Mando Corp., South Korea's No. 2 auto parts maker by sales, was the largest at 13.21 percent, with its interest in the six companies also exceeding 12 percent. (Yonhap News)