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NPS wins big from Samsung affiliates’ recent rally

The National Pension Service (Yonhap)
The National Pension Service (Yonhap)

The overall value of the shares in Samsung affiliates and subsidiaries held by South Korea’s largest institutional investor, the National Pension Service, jumped nearly 60 percent over the past year, according to data made public Tuesday.

The NPS’ shares in 13 Samsung units were worth 49.28 trillion won ($41.7 billion) as of Wednesday last week, up 57 percent from 31.4 trillion won ($26.7 billion) Jan. 2 last year, according to financial research firm FnGuide.

The whopping increase is largely attributable to the conglomerate’s crown jewel Samsung Electronics, which saw its closing price increase 56.7 percent -- from 38,750 won to 62,300 won -- during the cited period.

Owning a 10.62 percent stake in Samsung Electronics worth 39.48 trillion won, the state-run pension fund is the tech behemoth’s second-largest shareholder, after bedridden Samsung Chairman Lee Kun-hee. Late last year, the NPS held a 9.99 percent stake, valued at 23.12 trillion won at the time, but has acquired an additional 0.63 percent stake since then.

The value of its stakes in other Samsung business units, including electronic components maker Samsung Electro-Mechanics and construction firm Samsung C&T, also rose during the same period.

Samsung Electro-Mechanics, in which the NPS currently owns an 11.67 percent stake, saw its stock rise from 100,000 won to 137,000 won in the past year. The NPS’ shares in the firm are now worth some 1.18 trillion won, up from 806.1 billion won a year ago. Last year the NPS increased its stake in the electronic parts manufacturer by 0.88 percent.

The pension fund’s 6.96 percent stake in the construction unit is worth 1.48 trillion, up from 1.12 trillion won a year ago. It increased its stake in the construction firm by 1.26 percent last year.

The NPS’ move to up its stakes in key Samsung units is thought to be in line with the Korean government’s attempt to rein in family-run conglomerates here.

The number of shares it holds in Hyosung Group affiliates Hyosung Chem, Hyosung TNC and Hyosung Advanced Materials, for example, has risen by a combined 11 percentage points since late 2018.

Last week the government approved revisions to the nation’s Commercial Act, Capital Markets Act and National Pension Act that reinforce institutional investors’ rights to influence the management of companies.

Under the revised rules, state-run institutional investors such as the NPS can engage in the management of conglomerates more actively than before, influencing decisions on dividend policy and ownership structure.

The NPS manages more than 700 trillion won worth of assets and has more than 700 companies in its investment portfolio.

By Kim Young-won (