Hyundai·Kia Motors Swept Up, The Return of Pension Funds

Shift to Net Selling in One Year
Focus on Automobile and Eco-friendly Stocks
150 Billion KRW for 3 Consecutive Trading Days

Concerns Over Semiconductor Crisis Eased
Expectations for Hydrogen Policy Benefits
KOSPI Hits Highest Level in a Month

[Asia Economy Reporter Park Jihwan] The domestic pension funds, major players in the capital market, have switched to net buying on the KOSPI this month. During this period, pension funds focused on purchasing automobile-related stocks, stocks with high expectations for earnings improvement, and eco-friendly stocks. Amid the net buying trend of pension funds, the KOSPI, which secured a solid downside floor, succeeded in breaking its all-time high record.

According to the Korea Exchange on the 8th, pension funds net purchased stocks worth 184.9 billion KRW on the KOSPI from the beginning of this month until the day before. This is the opposite of the trend from June last year to last month, when pension funds continuously sold stocks on the KOSPI for over a year. During that period, the scale of pension funds' sales on the KOSPI reached 26.8186 trillion KRW. The shift to net buying by pension funds also contributed to the KOSPI setting a new all-time high closing price. On the 7th, the KOSPI closed at 3,252.12, up 0.37% from the previous trading day, marking a new record high in about a month. The previous record was 3,249.30, set on the 10th of last month. Unlike foreigners who net sold 187.3 billion KRW, institutions led the index rise with net purchases of 121.6 billion KRW. In particular, pension funds led the upward trend by net buying over 150 billion KRW for three consecutive trading days starting from the 3rd.

The stock most purchased by pension funds this month was Hyundai Motor, with purchases amounting to 78.4 billion KRW. Pension funds also acquired Kia stocks worth 73.5 billion KRW. Last month, pension funds also net bought Hyundai Motor and Kia stocks, ranking 2nd and 6th with purchases of 123.9 billion KRW and 82.4 billion KRW, respectively. Following these were Samsung Electro-Mechanics (43.6 billion KRW), Hyundai Mobis (27.7 billion KRW), SK Hynix (26.3 billion KRW), Mando (25 billion KRW), Doosan Fuel Cell (23.9 billion KRW), KT&G (21.8 billion KRW), Samsung C&T (20.5 billion KRW), and Hyosung TNC (19.2 billion KRW), which also ranked high in pension funds' net purchases.

The focus on net buying completed car manufacturers by pension funds is interpreted as reflecting the view that the industry, which had been hit hard by the semiconductor shortage, is approaching the end of this phase. Recently, Goldman Sachs forecasted that the semiconductor supply shortage causing reduced vehicle production by global automakers would ease by the end of the second quarter. In fact, last month's solid sales figures dispelled concerns about the semiconductor supply peak. Last month, Hyundai Motor and Kia sold 323,129 and 245,994 units respectively, up 42.7% and 49.2% year-on-year. Jeong Yongjin, a researcher at Shinhan Financial Investment, said, "Although supply disruptions could not be completely avoided in May, the results were very favorable compared to market fears," adding, "Despite concerns about the peak phase of semiconductor shortages, favorable production volumes were achieved, and worries about supply disruptions are expected to gradually ease." The improving business sentiment toward automakers extended to other automotive sectors such as Mando and Hyundai Mobis, which also saw net purchases by pension funds.

Pension funds also acquired stocks expected to improve earnings due to economic normalization and those with eco-friendly themes. Doosan Fuel Cell, a leader in hydrogen energy, is expected to benefit from the growth of the domestic fuel cell market following the government's hydrogen economy activation roadmap and from eco-friendly policies of various governments. Lim Eunyoung, a researcher at Samsung Securities, said, "Large power generation companies are expected to increase orders from the second half of the year to take advantage of hydrogen fuel cell policy benefits."

The stocks that pension funds focused on purchasing this month also showed good returns. Hyundai Motor (2.8%), Kia (5.1%), Samsung Electro-Mechanics (5.6%), Hyundai Mobis (2%), SK Hynix (1.2%), Mando (7.8%), Doosan Fuel Cell (11.4%), KT&G (0.2%), Samsung C&T (2.2%), and Hyosung TNC (5.4%) had an average return of 4.4%. During the same period, the KOSPI rose 1.5%.

This content was produced with the assistance of AI translation services.