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NPS hints at expanding local stock purchases for market stability

Health Minister Park Neung-hoo speaks during a briefing at Government Complex Seoul in Gwanghwamun, Seoul, Oct. 23. (Ministry of Health and Welfare)
Health Minister Park Neung-hoo speaks during a briefing at Government Complex Seoul in Gwanghwamun, Seoul, Oct. 23. (Ministry of Health and Welfare)



Minister of Health and Welfare Park Neung-hoo, who chairs a fund management committee under the state-run National Pension Service, said Friday that the pension operator could take part in the domestic stock market more actively, if needed, to support market stability.

“The NPS’ active intervention last month has helped stabilize the stock market,” said the health and welfare minister at a meeting in Seoul in the morning with members of the committee. “The pension fund operator will do what it can to meet the expectations of the domestic market.”

Although stable fund management and returns are two of the most important priorities for the NPS, market stability is important as well, he added.

For the past decade, the fund operator has tried to reduce its investments in domestic stocks while increasing its holdings of foreign stocks. But when the domestic stock market began fluctuating last month as a result of the pandemic, the fund operator began buying stocks in domestic companies. The agency is expected to continue its buying spree for a while, serving as a white knight for troubled companies.

The NPS said it would gradually increase its investment in global assets if the faltering domestic economy recovered in the latter half of this year. If the economy continues to be sluggish until next year, NPS said, it will consider selling foreign bonds and buying undervalued but risky assets as part of its efforts to flexibly respond to market changes.

By Ki Young-won (wone0102@heraldcorp.com)
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